Why Sigma Lithium Stock Surged 15% Today and Has Doubled in 1 Month

Shares of Sigma Lithium (NASDAQ: SGML) 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.

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.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.