Lithium Miner Stock Jumps Double Digits. What Gives?

Big EV news didn’t do it. Lithium is a key ingredient in the lithium ion batteries that power electric vehicles so a major EV announcement can move lithium stocks. On Monday,

Tesla

(TSLA) did say it might start selling the Model S Plaid edition—its fastest car—in China early next year. But that’s hardly earthshaking.

This time, a political development looks like the reason behind the pop. The first round of the Chilean presidential election ended with a conservative candidate leading. The Chilean IPSA Index was up 7.7% on Monday. SQM’s Chilean shares were up 8.4% in Monday trading.

Chilean politics qualify as a surprise. SQM, as a Chilean company, would be directly affected by any economic policies of a right-wing president. U.S. investors probably aren’t dialed into the result of that context.

Shares of other big lithium miners also gained on Monday.

Livent

(LTHM) was up 5.2%, though Livent’s South American assets are in Argentina—not Chile.

Albemarle

(ALB), which has a footprint in Chile, was up, too—1.5%.

But even a smaller player with assets only in the U.S. felt a bump.

Piedmont Lithium

(PLL) was up 5%.

The upticks seem, frankly, a little odd—like traders are looking at the reaction of one stock and seeing what peer stocks are doing.

The outlook for lithium is solid. EV penetration is increasing rapidly as the price for EVs comes down and as governments—and car companies—commit to more electrified personal transportation.

That theme, however, isn’t new.

In the long run, the market gets things right. Over any shorter span, however, sometimes stock moves can just look odd.

Write to Al Root at allen.root@dowjones.com