For the better part of three years, lithium was the trade that ate people alive.
If you bought into the electric-vehicle (EV) boom in 2021 and 2022, you rode a rocket ship higher — and then watched it come crashing back to Earth.
The metal that powers EV batteries, phones and home energy storage systems went from “white gold” to a punchline.
Prices collapsed. Miners cut production. Analysts who’d been pounding the table went quiet.
The whole space smelled like a funeral.
So you can understand why I raised an eyebrow when the data started telling a different story this year.
Because something is changing.
Lithium is rebounding. Not in a “hopium press release” way. The actual numbers are starting to turn in.
Production is climbing back. Physical lithium prices have climbed sharply off their lows. Money is creeping back into the names that spent two years sitting in the penalty box.
But here’s the catch about my system…
It doesn’t care about the story.
It doesn’t care that lithium is tied to the future of transportation. It doesn’t care that Wall Street is suddenly getting excited about a potential comeback.
It cares about the numbers — the factors that have historically separated the winners from the losers.
And when I run the sector’s flagship fund through the ratings, the result isn’t exactly what the headlines would lead you to expect.
Hold that thought — we’ll get there.
First, let’s look at what’s actually happening on the ground and in the pricing.
The Mining Data: Best First Quarter Since the Boom
We’ll start with supply, because that’s where the pain was deepest.
When lithium prices crater, miners do the rational thing — they stop digging. Why pull rock out of the ground to sell it at a loss?
So the fact that global first-quarter production just hit 116,000 metric tons — the strongest first quarter since 2021 — tells you something important. Producers are turning the taps back on.
Look at the shape of that chart and you can read the whole cycle in one glance. Those sad, little bars from 2021 to 2022?
That’s the world before everyone lost their minds over EVs.
The rip up through 2023 and into that monster 134,000-ton quarter in late 2024? That’s the mania and the overbuild.
And the wobble after — the drop to 91, the choppy recovery — that’s the hangover.
What matters is the right edge. The last four quarters read 112, 115, 112 and now 116. That’s not a dead-cat bounce.
That’s a floor forming and producers getting confident enough to ramp again. You don’t add supply back into a market you think is doomed. You add it back when you believe there are buyers on the other side.
That’s the supply story.
Now, let’s talk about the money story.
The Price: Off the Mat and Climbing
Production only matters if someone’s willing to pay for what comes out of the ground.
And this year, they have been.
Here’s the tape that actually moves the miners.
U.S. lithium carbonate started the year at a miserable $14.15 — the low on the chart, and about as unloved as a commodity gets. From there, it climbed hard, reaching $24.15 by mid-May before cooling off to around $20.75, where it sits today.
Its average for the year comes out to $19.72.
Do the quick math. Even after backing off the highs, the metal is trading roughly 45% above its year-start price.
That’s the kind of move that turns a money-losing mine into a cash-flowing one — and turns a left-for-dead sector into something worth a second look.
Now, I’m not going to insult you by pretending the top of that chart doesn’t matter. The price peaked in May and has rolled over since then.
That fade from $24 to $20 is real. And it’s exactly the kind of thing my system notices even when the year-over-year story looks great.
The X-Ray: What My System Says About LIT
When I want a read on the whole lithium complex in one ticker, I use the Global X Lithium & Battery Tech ETF (LIT) — the $1.6 billion fund that owns the miners, refiners and battery makers all in one basket.
It’s the closest thing the sector has to a heartbeat monitor.
So I ran it through Adam’s Green Zone Power Ratings. Here’s the reading:
Bearish. Red zone. A rating in the low 30s.
Now wait a second, Matt — didn’t you just spend 600 words telling me lithium is rebounding?
I did.
And the fund’s overall score is still soft because it ripped to a 52-week high near $92 in May and has since slid back to about $70 — a roughly 23% haircut that drags on the composite.
That’s the headline number.
But the headline number isn’t where the real story is hiding today.
Because a fund score is a blended average, and averages lie. So I did what I always do when a rating looks too tidy: I popped the hood and rated the holdings one by one.
Here’s what I found.
Of the 19 stocks in LIT that my system actually scores — the U.S. and developed-market names it can rate, setting aside the Chinese A-shares it doesn’t cover — 10 of them earned a “Bullish” or better rating on Momentum.
Ten out of 19. A clean majority of the ratable basket is already showing the kind of price strength my system rewards, even while the fund’s headline gauge sits in the red.
That is the tell.
Momentum is the factor that turns first, and it’s the single heaviest input in the whole model.
When more than half the names in a beaten-down sector start flashing bullish momentum before the ETF’s overall score catches up, that’s not noise — that’s the early footprints of a trend change.
The metal bottomed and ran 45% off its lows. Production is ramping. And now the individual stocks are starting to confirm it, one green momentum reading at a time.
So where does that leave us?
The way I read my own system today: the fund’s overall rating is still bearish, and I’m not going to argue with the composite.
But under the surface, momentum has already flipped bullish on more than half the names we can score.
Improving metal, ramping supply and 10 of 19 stocks going green on the one factor that leads.
This is exactly why What My System Says Today editor Adam O’Dell built the Green Zone Fortunes system — to spot these shifts before they show up in the headlines. It’s the kind of early signal that can help you set yourself up for massive gains before the crowd catches on. (You can learn more about the approach here.)
The headline says wait. The internals say the turn may already be underway.
That’s the whole reason I check the score and the guts before I believe — or dismiss — the headline.
Until next time…
Safe trading,
Matt Clark, CMSA®
Chief Research Analyst, What My System Says Today
