Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Albemarle Corp, the world’s largest lithium producer, posted a better-than-expected quarterly profit on Wednesday, aided by higher sales and prices of bromine and lithium, and raised its 2019 adjusted profit forecast, sending shares up 6% at $71.62 in extended trading.
The company sells most of its lithium on long-term contracts and hence was not affected by global trade tensions and China’s cuts to electric vehicle subsidies in June.
Sales from the company’s largest segment lithium, which is used to make electric car batteries rose 2.3% to $324.8 million in the second quarter, and sales of bromine, a chemical used to make fire extinguishers, surged 15.8% to $255.4 million during the quarter.
Excluding items, the company posted a profit of $1.55 per share, beating analysts’ estimates of $1.44 per share, according to IBES data from Refinitiv.
Net income attributable to the company fell to $154.2 million, or $1.45 cents per share in the quarter ended June 30, from $302.5 million, or $2.73 per share a year earlier.
The company raised its full-year adjusted profit forecast to between $6.25 and $6.65 per share, from $6.10 to $6.50 expected earlier and maintained its sales forecast.
The Charlotte, North Carolina-based company said total revenue rose nearly 4% to $885.1 million.
(By Nishara Karuvalli Pathikkal; Editing by Sriraj Kalluvila and Shinjini Ganguli)
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