Albemarle raises annual outlook on surging lithium prices

Reuters

Published May 04, 2022 04:29PM ET

Updated May 04, 2022 05:55PM ET

(Reuters) -Albemarle Corp, one of the world's biggest producers of lithium, raised its full-year forecasts on Wednesday after surpassing quarterly profit expectations on robust demand and higher prices for the metal used in electric-vehicle batteries.

The improved outlook also came in above market estimates and helped send the company's shares 16% higher in extended trading.

Lithium's central role in the production of electric-vehicle batteries has made it a coveted commodity as global efforts to decarbonize automobiles gather pace. That has pushed up prices of the metal to record highs in a boost for producers.

Albemarle (NYSE:ALB) said it expected its average realized lithium price to jump two-fold this year as demand continues to rise and supply remains tight.

The remarks echo comments from Tesla (NASDAQ:TSLA) Inc Chief Executive Elon Musk, who said last month that lithium supply was "a limiting factor" in the growth of EVs.

Albemarle said it now expected annual net sales between $5.2 billion and $5.6 billion, while analysts on average estimated a figure of $4.4 billion, according to Refinitiv IBES data.

The outlook is also underpinned by higher prices in the Charlotte, North Carolina-based company's bromine business.

Albemarle lifted its annual adjusted profit outlook to between $9.25 and $12.25 per share, from $5.65 to $6.65 per share. Analysts were expecting a figure of $6.22 per share.