Investors are betting that the rise of electric cars drives a period of rapid growth for lithium miners and battery producers, reported the Financial Times.
The Solactive Global Lithium index, which includes shares of battery manufacturers, has risen 32% this year to a record high, powered by gains for Chinese companies Ganfeng Lithium and CATL.
Sales of electric cars have surged in Europe and China this year, boosting the outlook for the battery industry. The world’s largest carmakers have pledged to spend billions developing new models. Meanwhile the EU said last week it might ban petrol and diesel cars by 2035.
“We believe that a transformational bull market is under way for speciality metals, as the green revolution gains pace and the ‘green recovery’ from the Covid-19 crisis offers the sector a boost from stimulus and regulation,” said fund managers at Baker Steel Capital Managers.