Why Rising Lithium Production Could Crush Fertilizer Stocks

The world has all the lithium it needs, but will struggle to ramp up supply quickly enough to keep pace with expected demand in the next five to 10 years. That promises to keep selling prices high in the near term, which will work to the benefit of lithium stocks such as Albemarle (NYSE: ALB) and SQM Industries (NYSE: SQM). That also explains why lithium producers are racing to bring additional capacity online.

There's just one problem: The gain in lithium stocks is likely to create more pain for fertilizer stocks, specifically those with exposure to potash nutrients.

That's not exactly what shareholders in top fertilizer companies want to hear, especially since the once formidable group of dividend stocks is treading water in a historic down cycle. But it's a real risk that has gone mostly unnoticed to date -- and it could significantly delay the long-awaited recovery for PotashCorp (NYSE: POT) and Intrepid Potash (NYSE: IPI). And these troubles could be just the beginning. 

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Source: Fool.com