How to Invest in Lithium UK – Invest in Lithium Today!

When investing in commodities – traders typically focus on precious metals like gold or silver and even energies such as oil and natural gas. However, more and more people are now looking at an alternative commodity that is seeing its demand grow exponentially – lithium. After all, lithium is the crucial component used to fuel the batteries found in smartphones, cameras, laptops, tablets, electric cars, and more.

In this guide, we show you how to invest in Lithium in the UK at an FCA-regulated broker in under five minutes.

#1 Stockbroker to Invest in Lithium UK – eToro

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How To Invest in Lithium UK – Choose a Broker

If you want to invest in Lithium in the UK, you will need to choose a broker that offers a suitable market. This typically comes in the shape of an ETF or buying stocks that are actively involved in the Lithium industry. 

The brokers to invest in Lithium in the UK can be found below: 

  • eToro – Overall Best Place to Invest in Lithium UK
  • Capital.com – Trade Lithium Stocks and ETFs With Leverage at 0% Commission

All of the above brokers are reviewed in full further down on this page – where we explore the specific Lithium investment products that each provider offers.

How to Invest in Lithium UK – A Quick Guide For 2021

Like most commodities, you can’t invest in Lithium in the UK directly. Instead, you will either need to buy shares in companies that manufacture and/or distribute Lithium or go through an ETF. As we cover in more detail later, the best way to invest in this commodity is through the Global X Lithium & Battery Tech ETF – which is offered by eToro on a 0% commission basis.

Here’s how to complete your investment in just five minutes:

  • Step 1: Open an Account with eToroFirst, you’ll need to visit the eToro website and open an account. Follow the on-screen prompts by entering your personal information and contact details.
  • Step 2: Upload Your ID – To pass the KYC process, you simply need to upload a copy of your passport or driver’s license.
  • Step 3: Deposit Funds – In order to invest in Lithium at eToro, you will first need to make a deposit. eToro supports UK bank transfers, debit/credit cards, and a number of popular e-wallets.
  • Step 4: Search for LIT – Enter ‘LIT’ into the search box and click on the ‘Trade’ button located next to Global X Lithium & Battery Tech ETF.
  • Step 5: Invest in Lithium – Finally, enter your investment amount (minimum $50) and click on the ‘Open Trade’ button to complete the process.

By following the steps outlined above, you have just learned how to invest in Lithium in the UK without paying any trading commissions!

67% of retail investor accounts lose money when trading CFDs with this provider.

Where to Invest in Lithium UK  – Full Broker Reviews

As noted above, you won’t be able to invest in Lithium directly, so you will need to go through a relevant ETF or stock. With that said, you also need to think about which broker to use when investing your Lithium-related asset. The broker in question must offer your preferred market at competitive fees, and of course – be regulated by the FCA. 

Our top picks for the best brokers allowing you to invest in Lithium in the UK are reviewed in the sections below:

1. eToro – Overall Best Place to Invest in Lithium UK

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To invest in Lithium in the UK in a low-cost and burden-free way, look no further than eToro. This popular online broker is authorized and regulated by the FCA, and your capital is protected via the FSCS. The eToro platform is especially attractive to beginners, as you do not need any prior investment experience to get started. Instead, all you need to do is register an account, deposit some funds with a debit/credit card, e-wallet, or bank account transfer, and then proceed to invest in Lithium.

In terms of what Lithium markets eToro supports, you have a number of options. The most common way of investing in this commodity is through the Global X Lithium & Battery Tech ETF. As we cover in more detail further down, this ETF invests in dozens of companies that are involved in the Lithium industry – which includes mining firms, manufacturers, and battery producers. At eToro, you can invest in this Lithium-centric ETF on a 0% commission basis.

etoro commodity trading

Furthermore, the minimum ETF investment at eToro is just $50 – or about £36. This allows you to gain exposure to the Lithium industry without needing to have a large amount of capital. The other option that you have at eToro is to invest in Lithium stocks. A prime example of this is Lithium Americas Corp – which is a Canadian mining company that is directly involved in Lithium production. By investing in Lithium stocks at eToro, you will also benefit from the broker’s 0% commission policy, and the minimum trade value equally stands at just $50.

On top of low fees and account minimums, eToro is also great when it comes to diversification. This is because the platform offers thousands of stocks and ETFs across 17 UK and international markets. You can also add cryptocurrencies, forex, gold, natural gas, indices, and more to your portfolio. eToro also offers a Copy Trading service, which allows you to choose from thousands of proven investors and then copy their portfolios like-for-like.

Pros

  • Invest in stocks at 0% commission and ZERO stamp duty
  • Minimum investment per stock investment is $50
  • Supports debit/credit cards, e-wallets, and UK bank transfers
  • Regulated by the FCA and covered by the FSCS
  • Used by over 20 million people
  • Perfect for beginners
  • Social and copy trading tools

Cons

  • Perhaps too basic for technical traders
  • No support for MT4 or MT5

 67% of retail investor accounts lose money when trading CFDs with this provider.

 

2. Capital.com – Trade Lithium Stocks and ETFs With Leverage at 0% Commission

capital.com review

Very rarely do experienced investors look to hold commodity positions in the long run. This is because commodities are volatile financial instruments that react to global demand and supply levels. With this in mind, you might also consider investing in Lithium on a short-term basis by trading CFDs (contracts-for-differences). In a nutshell, the CFD instrument will track the value of the Lithium-related market like-for-like. As such, if the market price of Lithium Americas Corp stands at $25.50 per share, as will the respective CFD.

One of the best ways to trade Lithium via CFDs is at Capital.com. This popular broker is authorized and regulated by the FCA, and covered by the FSCS. Capital.com offers a huge number of trading tools that can take your Lithium investments to the very next level. For example, you will always have the option of going long or short on your chosen Lithium market. Put simply, this means that you can profit from both rising and falling Lithium prices with a buy or sell order, respectively.

Furthermore, Capital.com offers leverage on all of its Lithium markets. For example, if you decide to trade Lithium stocks or ETFs, you can apply leverage of up to 1:5. Those from a professional trading background will be offered even higher limits. Regardless of the Lithium market that you plan to trade, you won’t pay any commissions at Capital.com. You will also benefit from tight spreads and both deposits and withdrawals are processed on a fee-free basis.

In terms of getting started, you can join Capital.com in under two minutes via the broker’s website or mobile app. Then, it’s just a case of meeting the platform’s £20 minimum deposit – which can be facilitated with a UK debit/credit card or e-wallet. You will need to deposit at least £250 should you wish to opt for a bank transfer. What we also like about Capital.com is that as soon as you have registered, you will have access to a free demo account. This will allow you to trade Lithium stocks and ETFs in a risk-free environment.

Pros

  • Top-rated spread betting and CFD broker
  • Licensed by the FCA
  • £20 minimum deposit (debit/credit cards and e-wallets)
  • 0% commission on all markets
  • Tight spreads and no fee on deposits or withdrawals
  • Supports thousands of financial markets
  • Convenient for newbies

Cons

  • Experienced traders might consider the broker too basic
  • £250 minimum deposit on bank transfers

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.25% of retail investor accounts lose money when trading spread bets and/or CFDs with this provider.

How to Invest in Lithium UK – Detailed & Explained in Full

Earlier in this guide, we took you through the Lithium investment process over a 5-step walkthrough. However, if you are investing in Lithium for the very first time, you might require a more detailed and explained guide.

With this in mind, below we expand on the steps required to invest in Lithium in the UK at top-rated broker eToro.

Step 1: Open a Broker Account

To open an account with eToro, you will need to click on the ‘Join Now’ button – which you find on the broker’s homepage. This will populate a registration form – like in the image below.

how to join etoro

You simply need to fill out each field by entering your name, mobile number, email address, and a preferred username and password. On the next page, you will be asked to enter some additional details – such as your date of birth and national insurance number. Finally, to remove all account restrictions, upload a copy of your passport or driver’s license – which eToro will verify instantly.

Note: UK residents can still deposit funds without completing the KYC process straightaway. This needs to be done before you can deposit more than $2,250 or request a withdrawal, so it’s best to complete now if possible.

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Deposit Investment Funds

Now it’s time to make a deposit so that you can invest in Lithium. The minimum deposit for first-time customers in the UK is $200 – or about £145. Although you will pay a deposit fee of 0.5% – this is countered by the 0% commission and 0% stamp duty tax that you will have access to when investing at eToro.

Deposit Funds

In terms of supported payment methods, eToro offers plenty of options. The easiest method to use is a debit or credit card, as this will be processed instantly. You can also opt for an e-wallet like Paypal or Skrill, which are also instant payment methods. Bank transfers are best avoided, as you might need to wait 1-3 working days for the funds to be credited to your eToro account.

Step 3: Choose Lithium Investment

eToro offers a number of markets that are tied to the Lithium industry both in the form of ETFs and stocks. With that said, the best option is arguably the previously mentioned Lithium & Battery Tech ETF that is offered by Global X. 

invest in lithium etoro

As such, in our example above, we are searching for this specific ETF and then click on the ‘Trade’ button once the correct market loads.

Step 4: Invest in Lithium UK

The final step is to complete the order box for your chosen Lithium investment. In our example, we are investing in the Global X Lithium & Battery Tech ETF at a total stake of $200. However, if you want to invest less, the minimum at eToro is just $50.

invest in lithium etoro

Once you are happy with your stake, it’s then just a case of clicking on the ‘Open Trade’ button. and that’s it – you’ve just learned how to invest in Lithium in the UK at eToro without paying any commissions!

Note: At the time of setting up our Global X Lithium & Battery Tech ETF trade, the market was closed. As such, we instead clicked on the ‘Set Order’ button. This means that eToro will complete our investment as soon as the respective market reopens.

Best Ways to Invest in Lithium UK

This section of our guide will explain the best ways to invest in Lithium in the UK. This is an important discussion to have, as you cannot invest in Lithium directly. As noted in the sections above, your Lithium investment vehicle will be a choice between stocks or ETFs that specifically track this industry.

Global X Lithium & Battery Tech ETF

The general consensus in this industry is that the best way to invest in Lithium in the UK is through the Global X Lithium & Battery Tech ETF. This ETF was first launched in 2010 and it currently trades on the NYSE Acra. This means that when investing in this ETF through a broker like eToro, you can enter and exit the Lithium market at any given time.

In total, this ETF has 37 holdings, all of which consist of stocks. These stocks reflect companies that are actively involved in the Lithium industry – covering everything from mining, refinery, battery production, specialist storage, and distribution. These 37 holdings amount to a sizable net asset value (NAV) of just over $4.7 billion at the time of writing.

Global X Lithium & Battery Tech ETF

Like most ETFs, the Global X Lithium & Battery Tech is weighted – meaning that more capital is allocated to certain companies within the portfolio. For example, the largest holding – at 14.08%, is given to Albemarle Corp. This US-based company is involved in fine chemical manufacturing, which includes lithium.

Other holdings within the Global X Lithium & Battery Tech ETF include Yunnan Energy (7.06%), Ganfeng Lithium (6.12%), Naura Tech (5.98%), and Contemporary (5.59%). The key point here is that in one way, shape, or form – all of the stocks held by this ETF provider are linked to the Lithium arena.

Global X Lithium & Battery Tech ETF

With that in mind, the theory is that when the global spot price of Lithium increases, so will the value of the ETF. In terms of past performance, this is where things get really interesting. For example, since the Global X Lithium & Battery Tech ETF was launched in 2010, it has generated average annualized returns of 10.62%.

Things get even better when you look at how the ETF has performed in more recent years. For instance, 3-year, and 5-year averaged annualized returns stand at 37.81% and 29.785 respectively. Year-to-date returns, as of October 2021, amount to 32.49%. If that wasn’t enough, the Global X Lithium & Battery Tech ETF also generated dividends from some of the stocks it holds.

Global X Lithium & Battery Tech ETF

This is paid out every six months and will reflect in your eToro account once the distribution has been made. And finally, when it comes to fees, Global X Lithium & Battery Tech ETF charges an annual expense ratio of 0.75%. Whilst this is higher than your average index fund ETF, you need to remember that you are gaining access to a diverse number of companies operating from within the Lithium scene.

67% of retail investor accounts lose money when trading CFDs with this provider.

Best Lithium Stocks to Invest in

The other option you have is to invest in the best Lithium stocks that the market has to offer. If you’re really shrewd, you could create a shortlist of companies that are involved in the end-to-end Lithium journey. For example, you might start with a company that is involved in mining Lithium, such as  Lithium Americas Corp and Piedmont Lithium.

best lithium stocks

At the other end of the scale, you might even consider investing in stocks that require Lithium batteries for their primary product or service. A great example of this is Tesla, which orders and consumes vast quantities of Lithium for its electric cars. This sentiment is backed by the fact that Tesla has a 3.71 weighting in the previously discussed Global X Lithium & Battery Tech ETF.

67% of retail investor accounts lose money when trading CFDs with this provider.

Is Lithium a Good Investment?

If you’re looking to invest in Lithium in the UK – you need to ensure that you do your homework before proceeding. Like all commodities, Lithium can be a very volatile asset class. This is because its global spot price is directly linked to supply and demand, which in turn, is fueled by fundamental events.

For example, as demand for electric cars and smartphones continues to rise, as will the need for Lithium. In theory, this should then filter down to the spot price of Lithium and thus – the market value of your stock or ETF investments.

Before we get to the specifics of what to consider before you invest in Lithium, let’s take a quick look at what this commodity actually is and how it has historically performed in terms of value.

What is Lithium and What is it Used for?

Often dubbed as White Gold, lithium is a core commodity used in electrical products that rely on rechargeable batteries. This includes everything from laptops and smartphones to electric cars and tablets.

  • As global consumers become more dependent on these products – especially in the emerging markets, this has the desired result of increasing the market value of Lithium itself.
  • After all, without Lithium, manufacturers would not be able to produce the aforementioned electrical products.
  • This is especially the case with electric cars, not least because the world is slowly but surely looking to move away from fossil fuel-based vehicles.

In terms of production, the vast bulk of Lithium mining is conducted across three South American economies – Chile, Argentina, and Bolivia.

Lithium Price History

Like all commodities, the price of Lithium is determined by supply and demand. That is to say, when demand for Lithium increases, as will its market price – and visa-versa. In terms of how Lithium is valued, the global benchmark standard is priced in US dollars. Furthermore, this is priced per metric ton.

lithium price today

  • As you can see from the image above, the average price of Lithium Carbonate per ton in 2010 was $5,180.
  • The price of Lithium peaked in 2018 at an average of $17,000 per ton.
  • This means that in 7 years of trading, Lithium increased its value by over 228%.
  • There has, however, been a drop-off since its 2017 highs, with Lithium averaging just $8,000 per ton in 2020.

On the flip side, if you believe that demand for Lithium can only get strong in the coming years, this price could represent a viable entry into the markets.

Should I Invest in Lithium?

To determine whether or not you should invest in Lithium in the UK, you need to look at the fundamentals. By this, we mean what specific drivers can result in the price of Lithium going up or down.

This can be a complex undertaking if you are a newbie in the commodity trading space, so below we outline some of the main considerations that you should make before parting with any of your investment funds.

Demand for Lithium in China is Growing at a Super-Fast Rate

In a similar nature to gold, China’s hunger for Lithium is growing at an exponential rate. This demand is linked to a number of core domestic industries, including ceramics and pharmaceuticals.

  • However, demand in the aforementioned industries is minute in comparison to China’s electric vehicle space, which is growing at a faster pace than any other region.
  • In fact, some estimates suggest that China could be consuming 800,000 tons worth of Lithium by 2025 for its electric vehicle demands alone.
  • From an investment perspective, this is great news for those looking to gain exposure to Lithium.

After all, as demand in China continues to move northwards, it is all but certain that the price of Lithium will follow suit.

Emerging Markets

It is also important to assess the correlation between smartphone and laptop consumption in the emerging nations with that of Lithium. After all, as more and more people in Africa and Asia purchase eclectic products that rely on Lithium-produced batteries, this demand can only be a good thing for the price of Lithium moving forward.

Lithium Prices

Unlike gold, assesses the market value of Lithium is no easy feat. This is for two key reasons. First and foremost, there is no centralized market or exchange that allows global investors to trade Lithium. With many of the largest players in this industry refusing to publish production figures, this only adds to the opaqueness of the Lithium arena.

best lithium etf

Second, there are many different types of Lithium, which again, makes it challenging to get a uniform market price for this commodity. This means that oftentimes, you will need to rely on the price of your chosen Lithium stock or ETF to ascertain how your investment is performing.

Correlation Between Stocks, ETFs, and Lithium Spot Prices

As we have covered extensively in this guide, the only way to invest in Lithium in the UK is through a suitable ETF or stock. In most cases, this isn’t a problem. After all, if demand for Lithium increases, as will its global spot price.

  • And in turn, the value of your chosen ETF or stock should also rise.
  • However, this isn’t always the case – as there is no guarantee that your investment will correlate to Lithium prices.
  • For example, let’s suppose that you invest in a Lithium stock that is involved in mining.
  • If the value of Lithium increases, then the company will be able to sell its products for a higher price.

However, other factors might come into play that negatively impacts the company’s bottom line. For example, taxes might be increased or unfavorable regulations could be installed. Either way, this is another risk that you need to consider before you invest in Lithium in the UK.

The Cost of Investing in Lithium in the UK?

Like all investments, in order to gain exposure to Lithium, you will need to consider the costs involved. These fees will be determined by your chosen broker, so research is crucial in this respect.

The main fees to consider when investing in Lithium in the UK as summarized below:

Deposits and FX Fees

Once you have chosen a broker that offers your preferred Lithium market, the first thing to check is what fees you will need to pay when you deposit funds. This is because some brokers can charge handsomely in this department.

Additionally, you also need to keep an eye on FX fees. In fact, we often find that brokers do not clearly present the fees associated with currency exchanges.

After all, Lithium is priced in US dollars, so as you will be funding your account in pounds – FX fees will certainly come into play. At eToro, you will pay just 0.5% on your deposit. After that, you don’t need to worry about exchange rates – as all markets on the platform are priced in USD.

Lithium Stock Commission

If you decide to invest in Lithium stocks, check to see what share dealing fees your broker charges. For example, the likes of Hargreaves Lansdown and Halifax charge a dealing fee of £11.95 and £9.50, respectively.

Lithium stocks etoro

You will be charged this when you buy your chosen Lithium stocks and again when you cash out. You then have brokers like eToro, which allow you to buy Lithium stocks on a 0% commission basis.

Lithium ETF Expense Ratio

When investing in Lithium ETFs, the provider in question will charge an expense ratio. This covers all costs linked to the investment, such as buying and selling shares, rebalancing the portfolio, processing withdrawals, and proving customer service.

The amount you pay will be based on a percentage that is then multiplied by your total investment. Anything above 1% per year is deemed expensive.

How to Invest in Lithium UK – Conclusion

This guide has explained that although you cannot invest in Lithium in the UK directly, there are plenty of other ways to gain exposure to this commodity. This includes buying shares in companies that are actively involved in this industry or ETFs that focus exclusively on Lithium. Whichever option you go with, you will need to have an account with a top-rated broker that offers your chosen Lithium market.

We would suggest taking a look at eToro in this respect, as the FCA-regulated broker allows you to invest in Lithium stocks and ETFs on a 0% commission basis and at a minimum stake of just $50 per trade.

 

eToro – Best Broker to Invest in Lithium UK

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$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

FAQ

How do you invest in Lithium in the UK?

Where to invest in Litecoin UK?

Is Lithium a buy or sell?

Like all commodities, Lithium is volatile and its market price is based solely on demand and supply. With that said, as more and more demand for smartphones, laptops, and most importantly – electric cars surfaces globally, this is only good news for the price of Lithium. However, you do need to do your own research into Lithium before you invest.

How is Lithium priced?

How much do you need to invest in Lithium UK?

About Kane Pepi PRO INVESTOR

Kane Pepi writes for several high profile publications such as InsideBitcoins, the Motely Fool, and Learnbonds. Based in Malta, Kane is extremely skilled at complex subjects related to financial matters - including a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and actively engaged in Doctorate Degree research, for the money laundering threats of the blockchain economy.