Shares of Sigma Lithium (SGML +13.24%) surged on Tuesday, rallying 15% as of 1:30 p.m. ET. With today's gains, the lithium stock has logged more than 120% gains in just one month.
Lithium prices have jumped sharply in the last few days, but this could just be the beginning of something big.
Image source: Getty Images.
Lithium prices could explode
Lithium prices shot up to an 18-month high on Dec. 9, with lithium carbonate futures price crossing 95,000 yuan, or roughly $13,400 per metric ton. The chairman of Ganfeng Lithium Group, a major Chinese lithium producer, recently projected demand for the battery metal to surge by 30% to 40% in 2026, driving lithium carbonate prices above 150,000 yuan.
Sigma Lithium operates lithium mines in Brazil, producing 270,000 tonnes of lithium oxide concentrate on an annualized basis. It is also building a second plant to double capacity.
NASDAQ: SGML
Key Data Points
Lithium prices can make all the difference to Sigma Lithium's top and bottom lines. In the third quarter, for instance, although its production volume fell 27% and sales volume dropped 15% year over year, Sigma's revenue still rose by 36%, as its average selling price improved by almost 60%.
Sigma Lithium stock could become unstoppable
In Q3, Sigma Lithium cut down its net loss by more than half to $11.6 million, partly because of its significant debt reduction efforts. It is aggressively paring its high-interest, short-term debt to cut costs, slashing it by 48% over the one year through November 2025.
Now, if lithium prices continue to rise, it should help the lithium miner cut losses even faster and even turn profitable. That's a very luring prospect, and explains why Sigma Lithium shares have exploded lately, in tandem with lithium prices. Just remember -- commodity prices, and therefore commodity stocks like Sigma Lithium, can be volatile.
