Here's How China Sent Shares of Standard Lithium Surging Today
Key Points
Investors are buying into the idea that the company will be a net winner from the trade conflict.
J.P. Morgan has recently made a significant investment commitment that aligns with the interests of lithium materials companies.
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Share in Standard Lithium (NYSEMKT: SLI) rose by a whopping 15.3% before 1 p.m. ET today. The move comes as the market digests China's latest move in the trade conflict and the favorable consequences of it for Standard Lithium.
China retaliates
China's Ministry of Commerce and the General Administration of Customs announced export controls on lithium batteries and other critical materials in the lithium-ion supply chain. As of Nov. 8, any Chinese company looking to export certain lithium battery materials needs to apply for a license from the State Council's commerce department.
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The controls give China, a country that dominates the lithium battery production market, significant leverage in its trade negotiations with the U.S. The announcement also highlights the importance of the U.S. securing its own supply chain of materials critical to battery production and the EV supply chain in general.
That's where Standard Lithium and its two key lithium-brine-bearing properties in the Smackover Formation in southern Arkansas come into play. Investors are speculating that the "near-commercial lithium company" will be a net winner from the latest developments, not least because J.P. Morgan has recently pledged to invest $1.5 trillion in its "Security and Resilience Initiative."
Image source: Getty Images.
It's enough to get the market excited. Still, investors should never forget that it will be some time before the company generates any revenue. There are no guarantees of future outside investment or the price of lithium materials.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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