Lithium Prices Strong


"The lithium market has improved considerably since 2009."

Strong first half earnings by Sociedad Quimica y Minera de Chile S.A. (SQM)—the world's largest lithium miner—bode well for lithium investing. SQM's 2010 annual net income increased more than 4.2% to $181.5M. Revenues represented a 29.5% increase over the comparable period last year. Segmented revenues for lithium showed a considerable relative improvement recording an increase of 47.6% over last year.

Investors will take confidence as this demonstrates that the lithium market has improved considerably compared to market conditions observed in 2009.

The traditional driver of the lithium market has been rechargeable batteries for portable devices, and it also improved beyond demand highs observed in 2008. The news that consumers throughout the lithium chain have also restored their operational inventories, boosting demand for lithium and improving sales volume is a welcome sign for lithium investors.

The capital market has also demonstrated optimism on the positive earnings report with the stock trading at $43.69 range, which represents an increase of 2.5% over the previous close and just over 15% appreciation for the month of August.

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