Chris Berry, president of House Mountain Partners and co-editor of the Disruptive Discoveries Journal, took some time at the recent Canadian Investor Conference to speak with the Investing News Network about trends in the lithium market.
So far this year, Berry hasn't seen many surprises in the lithium space, although he did note that there has been some "upward price pressure" for lithium."I don't know if it's a surprise, but it's certainly welcome in light of what we've seen in the last couple of years in the whole commodities space," he said.
For Berry, lithium is exciting because it's a very small market relative to the amount of press it gets. "Lithium is about a billion dollars a year in revenue globally, and yet it seems like every time you open a newspaper, there's another story about a battery or a car or something like that," he said. "So I think it's exciting and I think it's one of the reasons why investors are ... looking more closely at this space."
That said, Berry also cautioned investors not to get too caught up in all the excitement. He stated that it's still key to look at production costs when evaluating investment opportunities in the lithium space. "Production costs are the name of the game," he said, noting that while many have assumed in the past that commodities prices will keep rising, that isn't always the case.
"In order to survive in the space, whether or not you're a junior or a near-term producer or a producer, you need to be able to show the absolute lowest cost of production, not to mention offtake agreements," he said.
Berry also spoke about whether lithium companies will be able to meet rising demand, the increasing importance of technology for energy metals and the possibility of a technological substitution for lithium-ion batteries in the future.
In terms of companies, Berry said he's still watching Lithium Americas (TSX:LAC) as the company continues to move forward with Korean Steelmaker POSCO (NYSE:PKX).