Albemarle's Lithium Sales Jump in Q3, Outlook Remains Strong

Top lithium producer Albemarle (NYSE:ALB) saw its lithium sales increase 317.9 percent year-on-year in the third quarter of the year on the back of firm demand and higher lithium prices.

Lithium net sales reached US$1.5 billion, an increase of US$1.1 billion compared to the same period last year, as the company renegotiated contracts and prices for the battery metal stayed at high levels.

"We had an outstanding quarter driven by strong demand for lithium-ion batteries," Albemarle CEO Kent Masters said. "With our acquisition of the Qinzhou lithium conversion plant in China and mechanical completion of our Kemerton II expansion in Australia, we are on track to more than double our lithium conversion capacity compared to last year.”

Looking ahead, Albemarle’s lithium outlook remains strong. The company expects to more than double its net sales compared to 2021, and it is calling for its adjusted EBITDA to be nearly four times the amount seen last year.

Albemarle is expecting average realized pricing to be up 225 to 250 percent year-over-year due to the renegotiated contracts and increased market pricing. Adjusted profits from its lithium business are expected to jump 500 to 550 percent.

“Ongoing strength in lithium pricing and end markets offsets slightly lower expectations due to bromine-related weakness in key end markets, including consumer and industrial electronics and building and construction,” the company said in a statement.

Albemarle owns lithium brine operations in Clayton Valley near Silver Peak in the US, as well as in the Salar de Atacama in Chile. It also owns a 49 percent stake in Talison Lithium, which runs the massive hard-rock Greenbushes mine, as well as a 60 percent stake in the Wodgina hard-rock lithium mine in Western Australia.

The company’s Australia’s Kemerton I conversion plant achieved first production in July, while first output of spodumene concentrate from the first and second trains at the MARBL lithium Wodgina mine happened in May and July, respectively. Albemarle also acquired the Qinzhou lithium conversion plant in Guangxi, China, for US$200 million last month.

In October, Albemarle secured nearly US$150 million from the US Department of Energy to build a commercial-scale lithium materials processing plant in Kings Mountain, North Carolina. The funds are part of US$2.8 billion in grants awarded by the Biden administration for the development of electric vehicle battery manufacturing facilities in the US.

In Q3, the North Carolina-based company posted net income of US$897.2 million compared to a loss of US$392.8 million in the same quarter a year ago. Meanwhile, adjusted EBITDA reached US$1.2 billion, an increase of 446.9 percent.

On Tuesday (November 1), Albemarle’s rival Livent (NYSE:LTHM) also posted its quarterly results, saying it remains on track to complete its capacity expansion plans.

As of 9:00 a.m. EST on Thursday (November 3), shares of Albemarle opened 5 percent lower to trade at US$250.75.

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Securities Disclosure: I, Priscila Barrera, currently hold no direct investment interest in any company mentioned in this article.