Why Standard Lithium Stock Popped Today

• China is canceling aged lithium mining licenses, mostly for non-operational mines.

• Chinese lithium prices spiked connected the news, pushing lithium stocks higher today.

• 10 stocks we similar amended than Standard Lithium ›

Shares of Standard Lithium (NYSEMKT: SLI), a Canadian lithium institution that produces its achromatic metallic from filtering brine chiefly successful Arkansas, jumped much than 6% successful aboriginal trading Tuesday. Prices person settled astatine astir a 5% summation arsenic of 11:05 a.m. ET.

It each started successful China.

The Bureau of Natural Resources successful Yichun, Jiangxi Province, plans to cancel 27 lithium mining permits successful January, arsenic Mining.com reports today. Lithium prices successful China reacted sharply, up astir 7.6%, spurring large terms spikes among planetary lithium miners.

And yet, Mining.com notes that "all of the licences had already expired, immoderate much than a decennary ago, and astir were registered for ceramic clay oregon limestone mining." So however large of a woody is this, really?

Lithium analysts don't deliberation it's peculiarly significant, with 1 expert quoted saying, "the licence cancellations would person small interaction connected supply, arsenic nary of the revoked permits covered operating mines." Still, truthful agelong arsenic the licenses remained active, mining mightiness perchance person been resumed astatine immoderate of the sites, legally, adding to planetary lithium supply. This can't hap now, unless the licenses are officially renewed.

That's wherefore lithium investors are excited today: Future lithium supplies conscionable got rolled back, expanding the accidental of prices rising successful the future.

But here's the happening investors request to remember: All the supra is of lone theoretical value to Standard Lithium... until Standard really starts producing lithium! It doesn't yet, having nary gross (and nary profit) yet, and nary expected earlier 2028 astatine the earliest. Meanwhile, Standard Lithium is losing astir $187 cardinal a year.

Until that changes, it's hard for maine to telephone Standard Lithium banal a "buy."

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