Why Sociedad Quimica Y Minera de Chile Stock Popped Today

• China is revoking aggregate lithium mining licenses, pushing section lithium prices higher.

• Global lithium stocks are rising arsenic well.

• 10 stocks we similar amended than Sociedad Química Y Minera De Chile ›

Shares of Sociedad Quimica Y Minera de Chile S.A. (NYSE: SQM), 1 of the biggest stocks successful Chile and a cardinal planetary supplier of lithium for electrical car batteries, jumped 5% done 11:25 a.m. ET.

You tin convey China for the bully news.

The Bureau of Natural Resources successful Yichun, Jiangxi Province, plans to cancel 27 lithium mining permits successful January, arsenic Mining.com reports today. Lithium prices successful China reacted immediately, rising 7.6% Wednesday, and this pushed planetary lithium mining stocks higher.

Granted, "all of the licences had already expired, immoderate much than a decennary ago, and astir were registered for ceramic clay oregon limestone mining," arsenic Mining.com observes. And that raises a question: Will this truly interaction lithium prices?

Lithium analysts don't deliberation so. One expert is quoted saying, "the licence cancellations would person small interaction connected supply, arsenic nary of the revoked permits covered operating mines." Yet, arsenic agelong arsenic the licenses remained active, mining mightiness perchance person resumed astatine immoderate of the sites, legally, and that would adhd to the planetary lithium supply. It can't hap present until the licenses are officially renewed.

Long communicative short: The accidental of lithium proviso increasing conscionable got a small smaller -- and the accidental of lithium prices rising successful the aboriginal got a small bigger.

That's bully quality for investors successful Sociedad Quimica, aka "SQM," and here's adjacent amended news: SQM is 1 of the fewer lithium companies that's already profitable without these imaginable terms hikes. Last year, SQM earned $525 million, and generated affirmative escaped currency travel to boot.

Valued astatine 35 times trailing earnings, SQM isn't precisely "cheap," but if you're betting connected a lithium terms boom, SQM is simply a overmuch amended stake than astir alternatives.

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