Yes, lithium and ASX lithium stocks have had a shocker over the past 12 months.
Just 14 months ago, the critical battery ingredient was selling for almost 600,000 CNY per tonne. Now lithium carbonate prices cannot even reach six figures.
Of course, the flow-on effect for investors is that lithium stocks have also dived and are still out of favour.
Fairmont Equities managing director Michael Gable, in a blog post at the end of last year, thought the situation was so bleak for the industry that it could be reaching "capitulation".
"The past few weeks [have] seen the pace of selling pick up and bearish analysts turn more bearish," said Gable.
"My recent comments to clients and in the media was that we could be seeing some capitulation in the price."
Why lithium is bound to recover sooner or later
However, Gable and many other experts are still bullish on lithium shares in the long run.
That's because the world wants to reduce carbon emissions, and that can only take place with the electrification of common polluters like cars.
Also, the economy, both in the west and China, can only pick up from this point.
"Improving PMIs out of the US and Chinese demand for iron ore and copper suggest that we could be at or near an inflection point."
Gable also refutes the misbelief that supply is excessive due to new mines coming on board the past few years.
"Those that closely study lithium supply suggest that there actually hasn't been a surge in supply during the past year."
The stock I would want to buy and hold until then
So which ASX stock would one buy right now to hold for the long run?
I would suggest Mineral Resources Ltd (ASX: MIN) could make a handsome investment.
Firstly, it is already producing the good stuff, not just a mere speculative explorer.
Secondly, with a market capitalisation of $12 billion, the company has economies of scale and interests in other metals. This provides a diversified counterbalance to the swings and roundabouts of any one commodity.
The importance of this was painfully highlighted for shareholders of Core Lithium Ltd (ASX: CXO), who have watched their shares fall off a cliff after the company announced it was shutting one of its mines until the lithium price recovers.
Thirdly, Mineral Resources invests in junior explorers, providing the opportunity for a spectacular windfall if any of them start producing in the future.
Plenty of professionals agree with my bullishness.
According to CMC Invest, 13 out of 18 analysts currently rate MinRes shares as a buy.
Mineral Resources shares pay out a 3% dividend yield fully franked.
