Albemarle outlook up on higher lithium prices

Albemarle raised its annual revenue forecast by as much as 21pc, supported by higher lithium pricesthat prompted second-quarter revenue to surge.

The North Carolina-based specialty chemicals company said it expects $7.1bn-7.5bn in revenues for 2022, up from $5.8bn-6.2bn in its previous guidance.

Average realized lithium prices are expected to be up 225-250pc on the year following renegotiated contracts and increased market pricing, coupled with additional capacity coming online.

Lithium sales rose to $891.5mn in the second quarter from $320mn a year earlier, mostly reflecting gains in prices.

Albemarle raised its lithium volumes by 18pc in the second quarter from a year earlier as a result of the expansion of La Negra III/IV in Chile and higher tolling volumes.

The company's total lithium capacity is estimated to hit 200,000 metric tonnes (t)/yr by the end of the year, headlined by the added production capabilities from La Negra, its Australian Kemerton I/II and its Chinese Qinzhou I operations. That compares with lithium capacity of 85,000 t/yr at the end of 2021.

This capacity will expand to 450,000-500,000 t/yr by 2030 following several other expansions, the company said.

In addition to its lithium business, Albemarle shipped higher volumes of catalysts, increasing by 37pc on the year.

Catalyst sales were up by 42pc to $210.3mn in the latest quarter, but this was significantly offset by natural gas and raw material cost pressures related to the conflict in Ukraine.

Bromine volumes rose by 4pc, while sales rose by 35pc to $377.8mn from a year earlier.

Albemarle earned $407mn in profits on $1.48bn in revenues in the quarter, compared to $426mn in profit on $774mn of revenues a year earlier. Profits from the year-earlier period benefited by $429mn from the sale of its Fine Chemistry Services business to WR Grace.

By Anna Harmon