To The Moon

On November 19, U.S.-listed lithium stocks rallied strongly:

• $Sigma Lithium Corporation(SGML)$ surged over 20%,

• $Sociedad Quimica Y Minera De Chile SA(SQM)$ gained nearly 7%,

• $Lithium Americas Corp.(LAC)$ rose more than 3%,

• $Albemarle(ALB)$ climbed over 2%.

But the very next day, on November 20, the momentum flipped. The sector weakened across the board, with six constituents turning lower and Sigma Lithium leading the decline:

• $Sigma Lithium Corporation(SGML)$ once plunged 7.33%, now down 6.94% at USD 9.64, with USD 100M in turnover.

• $Albemarle(ALB)$ once dropped 6.98%, now down 6.61% at USD 117.37, with USD 357M in turnover.

• $Lithium Americas Corp.(LAC)$ once fell 5.85%, now down 5.5% at USD 4.84, with USD 58.8M in turnover.

[Surprised]One day of “euphoria,” one day of “selloff”—many investors are understandably confused. Are lithium stocks rebounding or still declining? What’s behind the volatility?

Let’s break it down using data + logic.

1. Why Did Lithium Stocks Surge on November 19? (Drivers Behind the Rebound)

① Global lithium prices rebounded, boosting earnings expectations

After more than a year of decline, lithium prices have recovered by roughly 10–20% from their lows in 2024–2025. Battery-grade lithium carbonate is now up 40%+ from its June bottom, stabilizing around RMB 80,000–90,000 per ton.
Lithium prices directly determine miners’ profitability — once prices rise, valuations quickly follow.

② U.S. demand is strengthening: EV + energy storage provide dual support

• EV demand: U.S. EV sales are expected to grow steadily into 2025, with Tesla, Ford, and other manufacturers increasing lithium procurement.

• Energy storage: According to Wood Mackenzie and others, U.S. energy-storage installations could reach 25–35 GWh in 2025, maintaining 20–40% YoY growth. Industrial, commercial, and grid-scale storage projects remain strong drivers of lithium demand.

With supply and demand recovering simultaneously, the market realized that “U.S. lithium demand hasn’t weakened,” giving stocks solid fundamental support.

③ IRA policy tailwinds + U.S. domestic projects gaining traction

The IRA’s 45X production tax credit (offering a 10% cost credit for domestic lithium mining/processing) makes the U.S. supply chain significantly more attractive.
Meanwhile, large projects such as Rhyolite Ridge and Thacker Pass have secured DOE backing. Policy incentives + real project progress have strengthened the long-term investment case for U.S. lithium miners.

IRA policy

④ Oversold rebound + bottom-fishing flows

U.S. lithium stocks are down more than 40% YTD, with ALB, LAC and others trading near 5-year lows.
After months of heavy selling, institutions and hedge funds moved in to buy the dip, followed by retail momentum. Sector volume jumped 30% on the 19th — typical short-term sentiment-driven action.

2. Why Did the Sector Pull Back on the 20th? (Why the Drop Was Inevitable)

① Lithium prices retraced — triggering profit-taking

The recent bounce in lithium prices was concentrated and rapid. Even a mild pullback can trigger selling, especially in commodity-linked stocks that are highly price-sensitive.

② Fed uncertainty pushed liquidity expectations tighter

Recent Fed comments have been hawkish, and rate-cut expectations continue to be pushed back.
This raised concerns about tighter liquidity — a major negative for high-beta sectors like lithium miners.
In this macro setup, money tends to rotate into lower-risk assets such as bonds. Similar pressure appeared in copper and semiconductor names as well.

③ Crowded positioning + excessive optimism needed correction

The rally on the 19th was driven mostly by “fast money.”Positions were crowded, and there wasn't enough new capital to absorb selling. Once lithium prices softened, selling accelerated.
Moreover, key catalysts—IRA subsidies, domestic project approvals—had already been priced into the rebound.
The 20th’s drop was essentially a rational correction to an overextended move, a normal short-term adjustment.

④ U.S. lithium projects still face execution risk

Permitting, ramp-up, cash flow, capex — all must be delivered step-by-step.
Markets have priced in the good news; from here on, performance will depend on who can actually deliver results.

3. What’s the Outlook? (Short-Term Volatile, Medium-Term Improving)

Looking at different time horizons makes the logic clearer:

🟦 Short Term (1–3 months): Choppy trading, with two key variables

• Lithium prices must stabilize near RMB 80k–90k/ton.
  If prices fall below the RMB 70k cost line, stocks will stay under pressure.

• Liquidity: Fed policy is the biggest swing factor.
  Rising rate-cut expectations = rebound potential;
  Tighter liquidity = continued pressure.

In short: the short-term path isn’t linear — expect range-bound movement.

🟧 Medium Term (3–12 months): Supply-demand improvement, recovery trend intact

• Supply: Most U.S. new mines won’t meaningfully contribute until 2027+, so near-term supply growth is limited.
  Some high-cost Australian mines remain reluctant to restart.

• Demand: EV + energy storage demand remains strong; U.S. lithium demand is expected to grow 15–25% in 2025.

• Policy: The IRA 45X credit will continue providing ~10% cost support through 2030.

Together, these factors suggest lithium prices may gradually move higher over the next quarter, with earnings elasticity showing up first in leading miners.

🟥 Long Term (1+ years): Demand grows, industry bifurcates, leaders win

The long-term logic is unchanged:

• EV penetration keeps rising

• Energy storage is a structural growth market

• Lithium remains a non-replaceable core material

But the industry will see sharper winners vs. losers:
Low-cost, large-resource leaders will keep strengthening, while smaller miners with slow project progress may struggle.

4. How to Approach U.S. Lithium Stocks: Three Strategies for a High-Volatility Sector

1) Conservative approach:

Focus on low-cost, resource-rich leaders with strong long-term contracts —
Companies like Albemarle, which have robust cash flow and better ability to survive cycles.

2) Aggressive approach:

Trade high-beta names — but always use stop-losses.
Early-stage projects offer huge upside but come with equally high execution risk.

3) Track key variables — not just sentiment:

• Lithium prices

• Downstream production schedules

• Inventory drawdowns

• Cash flow health

• Project milestones

If these trend positively, the stock price will eventually reflect it.

Final Thoughts

U.S. lithium stocks are currently in a transition phase, where “rebound momentum” and “fundamental repair” coexist.
This is neither the beginning of a bull market nor the start of a prolonged decline.
Short-term volatility is a natural result of liquidity shifts and sentiment swings.
Medium-term, stability in lithium prices and progress on U.S. domestic projects will be key.
Long-term, demand visibility remains strong, though industry differentiation will intensify.

Questions for You ：

1. Do you think this lithium rebound is just short-term sentiment, or a sign of a bottoming cycle?

2. Do you prefer large-cap leaders or small high-beta miners? Why?

3. At this price level, would you buy more, hold, or wait on the sidelines?

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