Lithium Part 1: Trading Tutorial and how to get exposure on the global markets [Video]

Today's video. We're going to be looking at part one of three on lithium and the upstream relevance. Hello, and welcome to another ACY Securities tutorial. My name is Alistair Schultz. I'm going to be a host through today's trading journey. Now in today's video, I did say before, we're going to be looking at the first part of three in the lithium series, but in this one, we're going to be focusing on the upstream elements. So, we're going to be looking at the raw materials, how process lithium actually works, what some of the things that actually are a part of the consumption and production stages. And of course, some of the solutions for actually trading lithium on the market, if you're not sure how to, so to get right into it. The first thing we are going to look at is the Brine example.

Now in Bryan, we do look for lithium. Basically, it's a very much easier way of actually sourcing it. In this instance, it goes over a salt flat, and we are going to be looking at digging that up out of the ground. We then hate it, suck all the elements out of the lithium that we require out of the water or the Brine concoction. And then we inject the leftovers back into the ground. So this is one of the cheaper methods of extraction for lithium doesn't require anywhere near as much set up cost. So when you do look for companies to invest in from a mining example, this is probably one of the ones that has the least amount of startup cost to get it going. And of course, generally means they would likely have a little bit more profit than the other methods.

Now, the next method is when we would actually deal with it in kind of a strict mine example. Now, in this instance, we are looking for lithium as a rock. So the methods are very, very similar to what you would find getting into a salt mine, or perhaps even looking into copper or any of the other sort of natural resources that do come into this nature in a Rocky format. Now dealing with them a little bit more expensive, but also happens to be one of the most common types of actually extracting it. Now, here in Australia, this is the common way that we actually deal with it. Most exports out of Australia, 80% of this variety. So, something to keep an eye on when you are looking at ASX listed stocks based on lithium.

Now finally, the final method is a new one and, uh, we have got a couple of companies, but lithium Australia have really perfected this 10, eight techniques so far. They are looking at doing extraction out of in Germany, but effectively what happens is they get all the leftover bits of the extraction process from the other two mining methods. And then they managed to grind it down and get the little bit extra out of it. They also do get a little bit more out of it when we comes to actually dealing with it from a brine perspective, instead of getting about 40% from standard mining, uh, a lithium extraction, when we deal within the Brine method at the very beginning, in this instance, they get closer to sort of 80% of all material that is available. So it is a very different method, but they all produce a slightly different chemical element at the end result. And that's purely because of some of the chemicals that goes into the manufacturing and refining and the production process.

Those three chemicals are Carbonite, hydroxide, or chloride. So depending on which element we look at or which why they are extracted from the ground, you end up lithium carbonate, hydroxide, or chloride, and all of them are actually quite useful for us. We can use them all very similar. They do look very much like a pile of salt at the end of the day or a very white grainy, sort of a now really sickly at the end of the day. Once we get to this point, this is where we start moving into the midstream tier of organization and development. The final stage is really looking at what happens when we're downstream at the battery side of things. So this is when we start getting into mixes and compounds and putting it with other chemical elements to try and turn it into the products that are we're required.

Now thinking about lithium consumption and the production element, the top three producers in the world are Chile, China, and Australia. Now that is for the exporting side of things as well. So we do tend to find that there is a lot to come out of each of these three countries. And if you do see mining operations occurring in them, there is usually a pretty high guarantee that they have a resource rich basis for it. Now, when we consider what are the biggest elements most of us were, or what the biggest levels of consumption for lithium are in the industrial side of the industry, most of us would usually assume batteries, particularly with the idea of EVs and all of the electric vehicles going ahead. Plus the battery technology that we actually need. We've seen that bit of a revolution in the last couple of years, pushing towards the green energy side of things, but that's actually not the biggest component that actually uses it.

We find that glass and ceramics make up the most of consumption at a whopping 32% while batteries are at 22%, of course you may have even heard about lithium tablets, which are used to treat some forms of mental illness. And of course, some other forms of health-related, needs that are there. So you will find an, a tablet size form as well, but there are a variety of uses for lithium and it is getting more and more important. And the needs for it to be extracted in large quantities are starting to grow. One of the things that I will make a point on though, is that the amount of lithium coming out of the ground needs to match the total amount of required in terms of building electric cars. Particularly now, there is so much focus on that EVP side of things, the batteries, and all of those sorts of style of development really do need to have an ACE at certain level of demand required to get that supply actually happening.

Now, if we start getting too many people trying to build that supply, obviously the value of lithium drops to a bucket until we start running out. We ended up with a scenario very much like oil, where we based it on supply versus demand for a number of years. And now we might be starting to say the regulative side in oil, but in Lithium's case, we have not got that far yet.

Now, moving forward, where can you actually trade lithium? There are more than 70 different stocks on the ASX that offer some form of lithium exposure. In a lot of cases, they are through the mining side of things, but just to name a few, I've looked at Anton resources, lithium Australia, which we've already mentioned, uh, Rio Tinto, very big mining company also deals in lithium, but also a variety of other commodities and resources. Pilbara minerals is another big one here in Australia.

Now, if you're looking for something where you're not quite sure which company you might want to go to, and when we've got more than 70 choices, just in Australia, you can imagine how many are around the world that actually deal with lithium. So if you're looking for something with a little bit more exposure, that gives you a little bit to the battery side, also a little bit to the lithium mining and perhaps even some exposure to the EV side of things. Then one of the options that you might have would be to look at the ACDC ETF or in this case, the ETF S battery tech and lithium. Now, in this instance, it is listed on the ASX Stock Exchange. You are able to have a trade of that. And we offered here at ACY Securities, as well as a few other varieties that enable you to trade it directly or perhaps in the mining companies and even in the ETFs example.

So, all of these are just some of the ways that you can trade ETS, but we'll look at some of the other options when we move into each side. So in the midstream section, we will look at what's involved and what companies might be in that refinement process. And of course in the downstream side of things, we'll have a look at what the end results and who, some of the manufacturers who were taking the advantage of lithium really are. Now, if that's, that's really all we've got for today's video, of course, if you need to get in contact with me, you've got a question you want to know a little bit more, or perhaps you just want to get in contact with me, feel free to shoot me a message on any of my social media channels. And of course, don't forget to like, and subscribe this video so you can get more great content from me and ACY securities in the future. Have a great trading day ahead.