Like many commodities

, lithium prices are volatile. Right now they’re on the upswing, prompting investment interest, but long-term investors should use caution.

In 2022, a benchmark lithium chemical hit a record above $80,000 per metric ton in key market China amid expectations of strong demand from a burgeoning electric vehicle market. That chemical, lithium carbonate, then fell to below $9,000 per metric ton as automakers pared their EV expectations.

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The price crash led to less investment in mining, helping stabilize prices, and an export suspension from Zimbabwe and a tax export rebate cut from China have helped boost prices. They’re now around $26,000 per metric ton.

The conflict between the U.S., Israel and Iran is also playing a role.

As the effective closure of the Strait of Hormuz, a key energy transit route, helps push up the price of diesel, interest in switching to electric vehicles is once again increasing, with major Chinese producer BYD Co. Ltd. (ticker: OTC: BYDDY) increasing its 2026 overseas sales target, notes Arif Gasilov, founder of sustainability and ESG consulting company Gasilov Group.

“It’s been an ideal situation for those long in the commodity early because supply is tightening just as demand accelerates,” says Dan Buckley, chief investment analyst at DayTrading.com.

“The long-term story as an input into EVs, grid storage and AI data centers is intact,” he says. “Near term, expect violent swings both ways with more speculative buyers and hot money in the market and producers incentivized to ramp production.”

Still, experts urge caution when considering investing in lithium. Buckley recommends most investors keep their positions small.

“If you think of your portfolio overall, then you think of how much you’d want in a diversified commodity basket, then you think of how much of that broad commodity exposure you’d want to have in lithium in particular, you’re probably looking at well under 1% of the total portfolio’s allocation.”

Investors who get in late on a rally tend to take too big of a position and end up being disappointed when volatility dominates and higher prices end up begetting higher supply and prices fall, he says.

Investors looking to have a balanced portfolio with commodities as a portion are generally best off having a broad basket and holding it over time with periodic rebalancing rather than trying to time the market, he adds.

“I think investors should have a longer-term horizon here, probably three to five years minimum,” Gasilov says.

But he does offer a particular lithium-specific caution. A longer-term risk is that sodium-ion batteries end up as a major competitor to lithium-based batteries for grid-scale storage and budget electric vehicles.

“Investors in lithium should factor that in and not assume demand growth is endless,” he says.

With that in mind, here’s a look at seven top lithium stocks and their business focuses:

— Rio Tinto Group (RIO)

— Sociedad Química y Minera de Chile SA (SQM)

— Albemarle Corp. (ALB)

— Lithium Americas Corp. (LAC)

— Standard Lithium Ltd. (SLI)

— Mineral Resources Ltd. (OTC: MALRY)

— Ganfeng Lithium Group Co. Ltd. (OTC: GNENF)

Rio Tinto Group (RIO)

This is one of the biggest mining companies in the world, and it’s diversified, which means it’s not a pure lithium play. But that can offer advantages.

“I prefer more diversified names to avoid the more binary, moonshot bets that you often see in the lithium space,” Buckley says. “It gives exposure without single-commodity risk.”

Rio Tinto’s recent acquisition of Arcadium gave it one of the largest lithium resource bases globally, he says. That buy bolstered Rio Tinto’s position with both underground hard rock mining and brine extraction. The latter method involves extracting saline groundwater called brine and letting the water evaporate in ponds, leaving lithium salts for further processing.

Sociedad Química y Minera de Chile SA (SQM)

Chile comes in as the world’s No. 2 lithium producer, but it holds the world’s largest reserves of the metal. This Chilean company is one of the largest lithium miners in the world.

Sociedad Química y Minera de Chile has a diversified product line beyond lithium. It’s also involved in specialty plant nutrition, iodine, potassium and industrial chemicals.

In addition to being involved with the energy transition by supplying lithium, SQM also makes solar salts. This mixture of sodium nitrate and potassium nitrate is used to store and transfer heat in plants that use mirrors to concentrate solar energy and produce electricity.

Gasilov points to SQM’s low-cost brine operations and its newly minted joint venture with state-owned mining giant Codelco, which he says secures SQM’s Chilean operations for decades.

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Albemarle Corp. (ALB)

Amid the push in Canada and the U.S. to build domestic critical mineral supply chains, North American lithium projects are becoming strategically vital.

That may bode well for Albemarle, a U.S.-based company that is one of the largest producers of lithium in the world, in addition to being vertically integrated, with mining, extraction and purification operations.

“Among established companies, ALB and SQM are notable for their strong balance sheets and significant production capacity, which help them manage price volatility,” says Andrew Izyumov, CEO and co-founder of 8Figures, an AI investment advisor and portfolio tracker.

Lithium Americas Corp. (LAC)

In addition to traditional hard rock and brine extraction, one lithium extraction frontier is in clay deposits, which this company is working on at its flagship project in Nevada.

Acid leaching combined with on-site purification is helping to make previously difficult clay extraction feasible, and General Motors Co. (GM) has acquired an interest in the Nevada project.

The automaker isn’t the only one interested in the project, as the U.S. government is also involved, with an Energy Department loan, a 5% stake in the company and a 5% stake in the joint venture with General Motors.

Standard Lithium Ltd. (SLI)

Here’s another North American lithium play, as its headquarters are in Vancouver and its flagship project is in Arkansas. In the southern U.S. state, the company is working to bring its direct lithium extraction technology to commercial production.

DLE technology, as it’s known, is a promising innovation in lithium production. The traditional way of producing lithium from brine involves large land- and water-intensive solar evaporation ponds. DLE, on the other hand, can extract lithium from brines more quickly, has much higher recovery rates, uses less water and takes up less land.

Standard Lithium’s joint venture partner is Equinor (EQNR), a Norwegian multinational energy company with deep pockets, giving the smaller company a layer of financial support for a project that isn’t yet in commercial production and therefore is riskier.

Mineral Resources Ltd. (OTC: MALRY)

This proven lithium producer is based in Australia, a generally mining-friendly jurisdiction that is the world’s biggest producer of lithium. The company has a 50-50 joint venture with Albemarle at the Wodgina mine in Australia, with Mineral Resources serving as the operator.

The mine is one of the largest known hard-rock lithium deposits in the world and has an estimated mine life of 30 years or more. Mineral Resources also owns half of the Mt. Marion lithium operation in Western Australia along with China-based Ganfeng Lithium Group Co. Ltd. (OTC: GNENF), one of the largest lithium mining companies in the world, offering some risk mitigation along with the Australian company’s partnership with Albemarle.

Ganfeng Lithium Group Co. Ltd. (OTC: GNENF)

While China is the world’s third-largest producer of lithium behind Australia and Chile, the Asian nation controls more than half of battery-grade lithium refining. Ganfeng Lithium is a vertically integrated battery minerals company, with lithium mining in addition to refining and processing. It’s also involved in battery manufacturing and battery recycling. In addition to China, the company has operations in Argentina, Australia, Mali and Mexico.

Lithium ETFs to Watch This Year

Global X Lithium & Battery Tech ETF (LIT)

One way to hedge against risks in a market like lithium is to own multiple companies packaged in an exchange-traded fund. These funds trade under a single ticker symbol, offering diversification between individual companies with their various fundamentals and geographic concentrations. This ETF offers further diversification by including battery and electric vehicle exposure along with purer-play lithium producers.

LIT has an expense ratio of 0.75%, which translates to $75 a year for each $10,000 invested. That may seem a bit pricey, but the ETF has a year-to-date return of 34.3% as of May 4, soundly beating its category average.

Global X Lithium Producers Index ETF (HLIT.TO)

Investors looking for more concentrated exposure to lithium producers can consider this Canadian ETF. It invests in companies involved in the mining and production of lithium, lithium compounds or lithium-related components. HLIT.TO is up 33.2% year to date.

The biggest geographical representation in the fund is the U.S., which could help position it well as the North American lithium supply chain gathers steam. The fund’s literature says it gives investors “exposure to a commodity that benefits from increased demand for lithium-ion batteries, which are increasingly used in electric vehicles and electronic devices.”

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7 Best Lithium Stocks and ETFs to Buy in 2026 originally appeared on usnews.com

Update 05/05/26: This story was previously published at an earlier date and has been updated with new information.