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Growing demand for lithium for energy storage is offsetting global weakness in demand for electric vehicle batteries.
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Management has implemented cost-cutting measures and productivity enhancements that are reducing expenses and increasing profitability.
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The lithium market is improving with recent increases in prices and improvements in the demand/supply environment.
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10 Stocks We Like Better Than Albemarle ›
Shares in lithium and bromine materials companies Albemarle (NYSE: ALB ) The data showed an increase of 32.3 percent in November S&P Global Market Intelligence. Such a violent move doesn’t usually occur without something going right for a company, and that’s certainly the case with Albemarle in November. Let’s take a closer look at why stocks fell in favor last month.
The stock received a slew of analyst upgrades over the past month, driven by three interrelated factors.
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The company’s third-quarter earnings beat market expectations, showing resilience amid a weak lithium price environment in the first nine months of 2025.
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Management’s cost-cutting actions and divestitures are encouraging investors to price in future profit improvements.
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The combination of recent improvements in lithium pricing and improved demand for lithium for energy storage is raising hopes that it could offset any weakness in demand for electric vehicle batteries.
Unfortunately, weakness in lithium market prices (the average lithium market price in the first half of 2025 was $9 per kilogram, compared to a range of $12 to $15 per kilogram per kilogram in the same period in 2024) meant that Albemarle reported a net loss of $202 million and a loss of $222 million in the third quarter.
However, management is not standing still, and a combination of cost-cutting and productivity measures means Albemarle is heading toward $450 million in run rate cost reductions in 2025, compared to its initial goal of $300 million to $400 million. These improvements encouraged management to forecast free cash flow (FCF) generation of $300 million to $400 million in 2025 – an excellent result under the circumstances.
In addition to cost cutting and cash flow generation, management moved to improve its balance sheet by selling Eurecat (catalyst services) and its 50% stake. and a 51% stake in Ketjen (Refining Catalyst Solutions) for a combined total of $660 million.
Lithium prices have improved recently (trading above $10 per kilogram at the time of writing) due to a combination of strengthening EV-related demand from China and continued improvement in energy storage demand. In fact, Albemarle reported “better-than-expected energy storage volumes” in its latest third quarter. Furthermore, supply growth slowdown and inventory drawdown have improved market fundamentals.
