There’s a sudden growth in demand for lithium in the past few years. What makes it an increasingly precious metal? Why is it considered a hot commodity nowadays? Why are businessmen and investors always on the lookout for lithium commodity prices? Find out.
What is Lithium?
Lithium is an alkali element and metal present in the earth’s crust and oceans. It’s found in compound form with other minerals often sourced from brine pools or igneous rocks. It comes in the form of a soft silver-white metal. It’s the lightest chemical element and metal. Its very low density allows it to float on water, a property not all metals have.
What Makes It Special?
Lithium is capable of storing big amounts of energy within a small size of it. The term used here is energy density. This is the reason the element serves as a highly important component of batteries for devices such as smartphones and laptops.
What Makes It in Demand?
There’s explosive growth in the use of digital devices such as phones and computers in the world for the past few decades. This explains the increasing demand for lithium batteries. More and more technologies are also adopting the use of lithium batteries to operate—remote controlled drones and planes, digital cameras, implantable defibrillators, and pacemakers. Analysts predict that by the year 2020, batteries will account for over 55% of the total demand for lithium.
Due to the great shift to these batteries, lithium’s prices have also surged. This results in a highly competitive industry, which is also driven by the scarcity of the commodity. Top lithium-producing countries include Australia, Chile, Argentina, China, and Zimbabwe, but mining in different countries operate secretly with companies not releasing any production data.
Why are People Investing in It?
The rise of lithium as a hot commodity has lured traders to invest in it. While there’s no direct way to do so, many traders invest in share contracts for difference (CDF) with businesses involved in lithium trade. There are even agencies that offer services such as market price assessments and forecasting to provide updates to investors and traders.
There’s no wonder lithium is growing in popularity as a prime commodity. The demand for this useful metal will continue to rise in the following years for sure.