Howard Klein: Lithium in Structural Shortage, Investment Opportunities in Oversupply

The Investing News Network had the chance to catch up with RK Equity’s Howard Klein at the recent Lithium Supply and Battery Raw Materials conference, hosted by Fastmarkets in Las Vegas.

Speaking about the main trends he expects to see in the second half of the year, Klein said he anticipates more involvement from carmakers in the lithium sector. “Auto OEMs, and also the incumbent lithium producers, have started to get very serious,” he said. “We're finally seeing auto OEMs take matters into their own hands and write reasonable checks.”

That said, Klein added that there’s a bit of “cat and mouse” happening as lithium prices have been declining since November.

"We thought the lithium price would bottom and then bounce. In May, it has,” Klein said. “We're now in a summer low.”

When asked about new supply and geographical locations he's interested in, Klein talked about the “North American lithium triangle,” from the Carolinas in the US to the Canadian provinces of Quebec and Ontario.

“Africa I think is also relevant,” he said. “We're focused on extra supply for extra demand. Ideally you'd like to find the companies that could get premium pricing for their product, but also premium valuations. And we think hard rock in good jurisdictions is the way to go.”

Klein also shared his thoughts on how to cut through the noise when choosing lithium stocks. “While we are in a structural shortage for lithium as far as the eye can see, there is definitely an oversupply of lithium investment opportunities,” he noted.

Listen to the interview above to hear more of Klein's thoughts on investing in lithium, geopolitical market dynamics and lessons learned. You can also click here for our recap of the Fastmarkets event.

Don't forget to follow us @INN_Resource for real-time updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.