[Click e-Stock] "Albemarle Sees Performance Boost as Lithium Prices Rise"

Lithium Prices and Sales Volume Rise Together, Signaling Performance Recovery

"Growth to Continue in Q2"… Long-Term Contract Effects Anticipated

There are expectations in the securities industry that Albemarle (ALB), a U.S. lithium producer, will see a full-fledged improvement in its performance, driven by rising lithium prices and increased sales volume.

According to Hana Securities on May 14, analyst Hyunsoo Kim stated the previous day, "The key drivers of performance improvement are higher prices and expanded production." The target price for Albemarle stock is set at $219.36 (approximately 330,000 won) based on the market consensus.

For the first quarter of this year, Albemarle posted revenue of $1.43 billion and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $660 million, with both sales and profit showing significant growth. Notably, revenue from the Energy Storage segment, which is responsible for the lithium business, jumped 70% to $890 million.

Due to expanded production at the Greenbushes mine in Western Australia and the Atacama salt lake in Chile, lithium sales volume increased by 21% year-on-year to 53,000 tons. Analyst Kim noted, "The average selling price reached $16.9 per kilogram, up 42% from a year earlier and 40% from the previous quarter," adding, "The effect of higher lithium prices is now fully reflected in selling prices, and this was further supported by cost lag effects from low-priced spodumene inventory and cost reduction efforts."

The outlook for future performance is also positive. Despite increased supply chain costs due to geopolitical risks in the Middle East, Albemarle has maintained its annual performance targets for the year.

Kim explained, "Although the annual cost burden from Middle East-related supply chain disruptions is expected to reach about $70 million to $90 million, these can be sufficiently offset through cost management and productivity improvements." If lithium market prices remain at current levels, sales and profit growth are expected to continue in the second quarter, supported by increased sales volume and the time lag in reflecting long-term contract prices.

Growth in the energy storage system (ESS) market is also anticipated. Recently, global lithium demand has shifted from being centered on electric vehicles to a structure where both ESS and electric vehicles are growing together. Kim projected, "Global ESS production will expand from 640 GWh in 2025 to between 1,200 and 2,000 GWh by 2030."

Valuation is also considered attractive. Albemarle's 12-month forward price-to-book ratio (PBR) currently stands at about 2.5 times, representing roughly a 30% discount compared to its global competitor SQM (3.5 times). Kim added, "Lithium price increases are now being fully reflected in earnings, and long-term demand visibility centered on ESS is strengthening. Given the recovery in performance and medium- to long-term growth prospects, there is still room for further stock price appreciation."

This content was produced with the assistance of AI translation services.