Why Albemarle's Stock Price Tumbled to Its Lowest Level Since 2020

Shares of Albemarle (ALB), nan world’s biggest lithium producer, tumbled arsenic Baird slashed its value target connected nan stock, pointing to depressed lithium prices.

The banal was down 7.6% astatine $91.64 successful mid-afternoon trading Tuesday, hitting its lowest levels since November 2020. Albemarle was nan biggest decliner connected nan S&P 500.

Baird lowered its value outlook connected nan banal to $127 from $170, while maintaining an Overweight rating.

Weak Lithium Prices Weigh

Baird expert Ben Kallo said that nan value of lithium has stayed astatine aliases beneath nan “bottom extremity of guidance” of $15 per kilogram truthful acold this year. Kallo said that Baird believes that “will group up a anemic Q2” for Albemarle. The institution is group to study second-quarter results July 31.

Research patient TrendForce said successful a study Monday that lithium prices “saw a important drop” past period to their lowest level this twelvemonth arsenic nan downstream artillery assemblage focused connected inventory reduction.

Trendforce explained that for July, request for lithium is expected to stay low, pinch prices falling to “the delicate range” of 80,000 to 90,000 Chinese yuan ($11,000 to $12,375) per ton. It added that moreover pinch supply-side contraction, “overall proviso will still transcend request arsenic nan anemic value inclination persists.”

Concerns About Impact of U.S. Election

Kallo besides pointed to concerns astir nan effect this year’s U.S. elections could person connected nan electrical conveyance (EV) market, which straight affects lithium artillery demand.

Kallo expects volatility going into nan vote, and nan imaginable of conveyance manufacturers holding backmost accumulation aliases committing to much stringent modulation targets afterwards arsenic they await clarity connected immoderate imaginable changes successful authorities EV taxation credits.  

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