ALB - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Albemarle Corporation Q4 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. today’s being that advised be conference recorded. is Please like the Bandy, conference Instructions] of I your hand now would Sustainability. Meredith [Operator to to speaker Relations & Investor VP today, go Please ma'am. ahead,

Meredith Bandy

And welcome right. earnings call. you, All to conference Thank fourth quarter Albemarle’s XXXX Joelle.

earnings Investor closing market Relations albemarle.com. you after section yesterday to our the material find at the posted released website were and Our the will under the

Kent Crawford, Masters, Chief Joining Catalysts; Chief Officer; Q&A. me today on Bromine Tozier, Raphael the and President, also President, Financial Johnson, are Officer. Norris, Lithium, President, call Netha Scott Eric available Executive and are for

projects a our constitute the within statements of outlooks, press to refer the made are forward-looking forward-looking the impacts that the federal language our in some GAAP, performance, applies also meaning these that including our securities in company about expansion release call impacted expected language conference pandemic and may As expected and same website. our COVID-XX reminder, statements a of found cautionary statements not during financial can our in Please reconciliation release financial both measures accordance presentation, of be that to comments note earnings our laws. prepared with the measures of this of proposed note which are of some GAAP measures to appendix this of call. Please today on and

Now, I will turn over the Kent. call to

Kent Masters

outlook. outlook that for to allocation. capitalize today. the our for see capital give us discuss all thank pleased On call, growth to Meredith. Thanks Albemarle accomplishments I'm say a detail you on will long-term Scott trends very highlight on joining and result more of I today's half the And and our businesses. strategy attractive we of will were previous recent quarter fourth net of end including also year particularly both for rebound we see or EBITDA adjusted solid in encouraged second reported bromine to and of began of the at above $XXX our million, I'm high by lithium. $XXX million the which sales and the results

to and $X.X billion both net $XXX generate of XXXX million We of between and full-year sales million, expect XXXX and results. EBITDA $XXX between up adjusted $X.X from billion

you're raise. a proceeds this we of completed As projects. this The acceleration month I'm return long-term the the capital growth to financial execute billion offering $X.X earlier aware provide of sure strategy including high our flexibility

Now, strategic shareholders. five, we our primary we strategy a drive four Albemarle slide turn to have clear objectives. to value sustainable has if for

profitably. grow will we First,

projects. diverse portfolio We have planned world-class return projects lever capital lithium bromine. high and and identified resources our a in intensity These both of low

Over the past budget. five built years, projects on time on the capabilities internal and these execute and we have team to

for In addition, relationship we projects. have are that these commercial with customers the long-term required

our are adequate while for are their to We strategic requirements returns aligning working achieving that with ensure we shareholders.

get be growth you Of bromine the will returns include our majority Q&A. in be course, we investing our the highly at give Netha to will lithium. we projects. will attractive I'm Brownfield happy detail projects to But same efficient be sure, short more paybacks. and when with time, of will This

maximize Second, will we productivity.

Over essential phase. move the is ball, the take Operational generation and into for And supporting including and growth generating an optimized flow successful, not we across will growth. very accelerated earnings off eyes flow business program. our cost past our have we savings even discipline sustainable cash cash year, we our as

portfolio assess opportunities, unlock capital we have our we with discipline, will shareholder will value. as for the past, actively return our our we focusing investments to opportunities invest highest Third, in on just

our will Fourth, businesses, for sustainability We will Albemarle. core across advance and a finally, to and also is rating support credit dividend. continue which grade value investment maintain we our our

recognizably, Most lithium vehicles. the to the to electric the from sustainability our through battery Our of end of emissions increase value chain resource products. enable the the products adoption develop is use we gas greenhouse that reduction throughout aim of

to sustainability produce fires continued technology fuels. charging consumer With business refiners and the regulatory ideal electronic changes, catalyst investments environment equipment. and Our EV step-change infrastructure to advancements by by cleaner in bromine helping adoption. contributes like safety transportation preventing is products And contribute for a in current our in stations,

are are EV We and increase over Europe. by EV expected by seeing XX% in sales of XXXX in acceleration XXXX. out increased in led demand China in XX% this Global demand play global the new sales during rebounding and to

right higher third is Benchmark Group. to than the analysts growth see projections we CRU on and Roskill the five Based to you you slide, demand demand next today. tons around internal This can that XXX,XXX lithium the Minerals reach as hand than party of X.X like the coming years. side from will see, by On million estimates, believe our over years. is XXXX, But industry XX from the slightly see projections significant more for up tons the expects consensus industry in the

the lithium, and metrics able is to you forecast detailed customers suppliers see to of use we generate these gauge with strategic external to internal lithium As estimates, demand in industry take and a On forecast. other leader market. the our seven, Albemarle future the discussions slide

estimates. While demand outlook lithium above Albemarle's for is party third

is from of outlook targets automotive below OEMs. the some Our ambitious more

that estimates vision production million Tesla's of translate to roughly by of tons market. alone hours the demand X.X for three means That lithium. battery would entire example, XXXX Tesla's of terawatt For would exceed

year. shift later this does over decade. from outlook next nameplate major this consumer example, support potentially ranges like years. per is expect tons technologies incremental XXXX, capacity European if be to times. vehicles which we've the Wave our tons major intensity increased a per impacts complete charging lithium consists we and vehicles solid could lithium battery that to Wave to like demand, battery in the Battery with which of our grow and double improve size battery grow larger batteries in to experience note electric longer expected year. projects, XXX,XXX is about year. incentives also electric to innovation IV vehicles, and driving II Total decides adoption other lithium Since XXXX XX% assume Advanced La XXXX, by driving Two and is led will conversion X two EV year, state increase five nearly tripled U.S. consumption electric per as trends larger for XX,XXX which lithium batteries III and battery Negra battery It's size. adopt to would the shorter to technologies to not our I of more estimates. demand expected by Later to to important XX% X. projects, regulatory per more year we refer than Additional and this current capacity project by Kemerton and

term with customers of Over years, we the this projects. last portfolio volume with execute to engaged commitment five our long

Now, model. with new customers asking this in acceleration to repeat demand, are the us

Nevada. part of capacity. conversion waves the over could be MARBL This projects intensity, to our annual third than our planned silver more The asset plan Wave identified tons lower attractive in a nameplate With of expansion a joint expect three Our again we would these add peak projects XXX,XXX venture, X at and double once which capacity next wave two smaller next would expansion to capital China, our years. in generate of five very includes returns.

Another and III in project in IV, Australia. a site, brownfield on plant China Kemerton a mega and new

for could before identified in supply, to further options X Asia, North our the projects. opportunities and X have We China support includes and in expansions also near localize continue, we expand include potential restart update hydroxide to Wave fourth Australia, and carbonate looking manufacturer. me a to Carolina. wave And at you the for projects. battery customers These let by our converting Wave example, conversion on the Mountain of to facility Southeast mine also Kings

track mid So the add end I II, Kemerton Kemerton for in completion add of strong the lithium processes. to La hydroxide in will XXXX, to IV very demand. new enables these track commercial Western on core term to plant and hydroxide following III capacity expected remains market the at Both customer late project reach mechanical in beginning our significant completion in sales in and lithium qualification XXXX. and capacity projects conversion carbonate long curve, Australia Negra commissioning line XXXX. of is lithium with our is mechanical cost us low on

and compelling economic support from three As key capital Wave expect X move Wave to in these efficiencies for We achieve to projects we an beyond, can estimated X we returns. intensity XX% reasons. capital returns and reduction

scale. First, execution standardized experience of we were in our with able to by economies plants project leverage building

a new we expect would building we or XX,XXX example, hydroxide at be to per Kemerton what year, two standard similar tons plant today. For are trains

we'll and I La move moving and to to moving in Brownfield economics, Kemerton Negra so just and IV. Kemerton on. III and cases, Likewise, La we're IV Second, and as from I Greenfield to III II Negra II many from today we're from

sites, call plants, will As the Kemerton, with mega conversion. multiple support standardize we be large building focus scale able for on lithium trains to what

Finally, as additional jurisdictions, expanded and Xinyu our [ph] low in we buying did XXXX. we'll cost in or facilities facility then we building and be successively acquired when China

the challenges our global it of by XX%. over and consecutive how to would out. sustainable to team and during achieve grade out us strategy. strategic rating for We improve initial term play to their XXXX our projects XXth improving hard up to significant work year And $XX our team baseline discipline, the grow achieving well has pandemic, keeping year ourselves our long Albemarle maintaining Scott transparency. We review Before targets. of completion. to the profitably, continue by on objectives, track our downturn. Despite demonstrated results, any the establishing pandemic like in credit I'd on to year laid I I increases major turn productivity reporting cost predecessor my when operate acknowledge maximize sustainability our ability completing related delivered. our capital of our investment the businesses million think ago, and set imagine throughout above to We our we finally, environmental recent dividend of all savings lithium financial A all XXXX data don't can as progress as the XXXX,

now to financial the over I'll results. the Scott call Now a detailed XXXX of for turn review

Scott Tozier

a of has was and good the to volumes income morning decrease GAAP due reduce Kent about expected of year. reduction quarter was lithium at end excludes primarily adjusted reduced previous rates. improvements Thanks, million, in fourth high the prices $X.XX, to million, outlook. in EPS into the over loss to $XX a generated year This compared discount $XXX by net coming of XX% sales prior due catalysts offset everyone. But and our Albemarle mark-to-market of bromine. lower pension net and

$XXX outlook. EBITDA previous of was As above Kent stated, million, our high end adjusted the

was Pricing a they due EBITDA due to rebounded refinery to for at year. XX contract the pre-pandemic goods. business declined the remained million, This with by ongoing adjusted the down down to declined million by unusually were XX% QX as and than travel agreed In EBITDA sequentially, and XXXX, primarily EBITDA slide in for an Lithium's about due HPC adjustments the QX the Catalysts were both higher to well mix. Fluid versus pricing segment. volumes. in product to well customer Turning look demand expected benefited quarter late down and due combination a higher lower most capacity a Hydroprocessing from business pricing. be full restocking demand as year $X and customers offset $XX Volumes increase fulfilling as contract relative prior their challenged million, comparable business year to news prices. three has Bromine supply term Cracking strong lower up reduced improving Catalytic $XX quarter. higher to to was commitments. of continues due is volumes of also volume of utilization or restrictions, raw some demand, overall materials XXXX. Cost was Bromine's compared but The imbalances improved story. short the tough EBITDA impact by and to FCC as a savings essentially the levels. finished about or to catalyst higher margins. help volumes good prior

million, $X corporate to we of higher slightly year due costs. to and half chemistry and the compared sense Comparing get full second it see and corporate slightly a can quarter the lower vary to is rebound and contract fourth mix driven in quarter, other of Full FCS services results strong you for category business lithium year bromine. particularly to very EBITDA by a Our The were to decreased and results fine the started XXXX, of history. see can quarter.

necessary committed We to We are We'll fund financial remain with to investment to and pivoting high to also to our projects growth positions. leadership support customer to allocation capital continue prioritize maintain dividend. maintain our return the align credit growth preserving flexibility our demand strategic rating. grade and

we be projects the Although the return higher opportunities. average, historical than lower will dividend growth while growth out next enable may of that wave build

approach pursue Finally, ventures. M&A a including will we disciplined joint and to and thoughtful investments,

said As likely of acquisitions M&A see cases on quickly returns the grow bolt in us assets, past, we most better in be than you'd where buying us allows the lithium would do generate to and building. conversion more

our performance We solutions are Services of you and and in sale expect Chemistry Fine the months. coming the finalizing businesses to catalysts update

cost two and least of we to turn times look These capital dated through Let's In in from The projects mid or XXXX to fund to for weighted investments to our reduce proceeds sheet. will cycle our as the to cash lithium meantime, at the This is a XX bromine on pricing. at the cash business. projects returns offering and XXXX. interest of about accelerate incremental attractive, are use these long use they our holding proceeds XX% sheet. are plan will large, generate for of bulk are proceeds growth. growth, the of remainder and average enable profitable spending which The with capacity balance with we slide at as highly The are for balance us debt our cash expect returns equity approved. of primary on drag most to XX% to delever, expense of instead enhancements the

results EBITDA. year-over-year. leverage a Pro times accelerate for leverage range, and ratio our two but expect we're returns and two half to Our expect to shareholders. Overall, offering, the adjusted as XXXX growth long that term to forma to increase below needed net target to improve deliver remains we

XXXX. total expect also upside to we net $XXX million continue net recover savings. higher of be of between the sales million Adjusted ongoing XXXX, and $XXX the For sales suggests events from EBITDA our higher to to as compared businesses to and company cost due potential year-over-year

We to accelerated expect as we to our growth be higher slightly execute year-over-year CapEx begin projects.

Rouge our of are And what of results the point, included start there of expected from for QX. will potentially we bulk higher lower expect However, if Baton that these due XXXX. situation as restart than the changes. this earlier any material in severe some plants; and well higher still the lithium At Magnolia It's for impact so, EPS and do two is to And Our new will we four down than shut depreciation, I operations more and U.S. taxes facilities. weather, down cash have temporarily this be cash Bayport, Pasadena, higher since $X.XX lower of the evolving. have share QX have possible Due mentioned is diluted to weather due increased an is impact to the will spending been we it plants. taxes Expectations $X.XX to these adjusted to year to is plants as Once to to currently inventories, last this update they we Monday. as safe up outlook. XXXX and be Net is projects as you in count. winter recent we'll

Let's are to turn to XX. to flat slide expected relatively XXXX. Lithium be compared results

We as higher with well volumes, North restart as late improvements. expect efficiency production slightly modest the year, last American of

anticipate still on for for point, pricing volumes products. to technical we expect usual, and back weighted average we realized slightly At this lithium. year full depending pricing grade be half As lower carbonate

La year-over-year contracts to structures the partially startup will slightly increase cost market in Lithium related associated improving to increased be and new for year-over-year, earnings. cost Kemerton long to provide term Our as lithium price the with XXXX Negra prices. efficiency expect flexibility costs higher intact. we continued Kent is PCS be discussed, catalysts, higher and response improvements. offset to results story including In flat And growth by

chemicals strengths support to refining American see recently catalysts to economic catalysts our more recovery would Longer with primarily and to position market for challenges due We customer expect the to on and full catalysts vehicles. as results capitalize Q&A. who the our public during we electric for business a we continued the Raphael, in result continuing to specialty This business decline are that of and renew North on color is emerging the give in de-select year market. volume. expect improve markets bromine, our a In as one in plants. album global and can we renewable fuels the grow to term, crude indicated producer chemicals a return catalysts XXXX out modestly, opportunities they sold

Our ongoing offset savings initiatives of the inflation. should impact

vehicles. fire XG new back strategic to increases to like our we ahead, trends, for I'll and turn demand driven review XXXX. by products objectives safety electric for steady our flagship it Kent technology Looking see

Kent Masters

finished ahead Thanks, about excited are Scott. of opportunities XXXX. us strong in Albemarle the we XXXX. in And

successful new We X lithium strategy. of and The execute our our will expansion to investment term in and projects long Wave continue on completion decisions bromine. projects

We are commercial investing. customers also capacity reach agreements with for a majority new to prior working of to

businesses, operational continue across continuous and We including reduction, cost productivity excellence. lean improvement to will with execution our maximize discipline principles, project

to expect XXXX. productivity $XX achieve improvements in million We of

will of dividend. capital and We our disciplined in investing credit rating high maintaining investment supporting stewards return be grade growth, our

three near implement Finally, science we to improve based reduce that, existing like at of exploring to including options our our questions. open to up across target call for will company greenhouse operations continue term And and with setting emissions gas goals sustainability our we'd for the and businesses. all

over Joule, So to you.

Operator

Bank. first David comes Deutsche question Thank Begleiter from Instructions] you. Our with [Operator

open. is now line Your

David Begleiter

to expect forward? will recycling a role in going what the Albemarle's in of bigger Thank lithium you. lithium, morning, Kent, market? Good part be And you on recycling become do when it

Kent Masters

bit that, a with start maybe more I'll little can So, details. Eric let me -- give

that major before becomes of business. around mean, lithium, be to years got but it a activities I a number we expect we've So out

in for be lithium there has So then its and for lifecycle back run enough market to to the it basically, come a to in - recycling. vehicle

I think look conversion So those we'll there's our -- facility. see that. a when component have in like you lot to at of But looks I options. our and that a that lithium being mean, roll business recycled,

So years anticipate we of to play would that comes that, a would fruition. in that number out before we it's but

add anything you to Eric, there? want So

Eric Norris

set In Europe, add who EU, the I'd within targets in customers, Europe, in The discussed. and battery we're some efforts are is views it development plants Kent. Sure, that conversion the those for focused run have Those way as of EU cases, being capabilities. with in a its those in how and and number for and when investing both being capability. might be David, example, ready. existing that, offering the adapt industry on of doing and process some technology will recycling as U.S. on pointed our into or Kent linking very it designs already And novel directive. are plants our we it's still out, part we

So with really that its next develops to and global of it Albemarle is decade. footprint across our really take the base, well-positioned and advantage it spread is as in various days. early cathode the with customer technologies trend But it's

David Begleiter

Thank do these be eight. forward? just formal And a projects you. listed your should projects moving in see, how you And moving rank now, will slide right on of order which mind your and expect on first? likelihood as Wave we projects, X forward you When announcement,

Kent Masters

Yes.

that's of we kind them, the think order I order. our that listed

on China an really facility Greenfield it, we it's would where acquisition be it's before in depending thing a now. element first whether on. could doing at that probably planning on We're an it use a then, to working that acquisition an that, a expect a move FID the And around it to Albemarle now. see Greenfield. we're XXXX, on come of working But acquisition. investigating we point that a still work it be plant. So to But And or or an late we'd has some it facility, on becomes would

David Begleiter

much. very you Thank

Operator

Thank you.

comes Kallo Baird. Our next Ben question with from

open. Your line now is

Ben Kallo

volume time [ph] all that? visibility $XXX I some taking Not -- Could think back. how Like question. move about can XXXX $X XXXX, into year meet step you we we and big can those in taking but of from weaving how for maybe like these about for And announcements and well? ask pricing lithium puts growth then to you OMS over billion you year in auto as a just And year? just going Streets the next talk us to you. your give I'm in your for my then million smaller for Maybe your year. think see lead a bit guidance just and from then attack about both then Thank to EBITDA you as start-ups. Thanks this takes salespeople are companies next next with and sales talk

Eric Norris

morning, This Eric Norris. is Ben. Good

visibility, was the of terms which term, in near first think First we see I your question.

that right? is take, demand. One what us ground of we led -- happens some the approaches outlook on with micro the referenced in And approach our is That is two have demand of you've which our macro of call, that salespeople. a exactly part Kent what a We modeling increase on to announcements a described big to with macro has basis. the

has years. strategy what into will to and continue the discussion of a chemistry, quantity use that customer of term follows specific contracts and commit with be a they a point location to secure requires a And at from that volumes. are to three to anywhere discussion That five view. details from to Our been long looking

us I'd in need have. So positioning we additional the you giving reasonable our and certainty expand good resources second regard, in quite well repeat with your question. to visibility characterize could grow market and that is we us to the Maybe the

Ben Kallo

about the Street should My to think -- growth, Can from we from that you and modeling and was just puts takes coming XX% the about is XXXX second should lithium mostly XXXX. talk it's new question pricing -- about you about volume guidance, you're how to that versus but think bringing rebounds that to we and maybe then the without having give move giving without contracts? on as

Scott Tozier

that take question. is Ben, Scott. Yes. I'll this

the III is with and for volumetric Kemerton as I that La into Negra IV you look So lithium of highlight and coming clearly growth II from startup the year. and the XXXX,

early refining catalysts market. transportation see in in of and However, improve. growth projects that we're to we those into continued to to And do and additional refinery utilization continues able growth some fruition, some come as as fuels, place the potentially recovery bromine,

we're XXXX year. into that very I return well-positioned see So, going think and in meaningful to high growth

Ben Kallo

guys. you, Thank Great.

Operator

Thank you.

Chris comes Loop Capital with question next Our Kapsch Markets. from

is Your line open.

Chris Kapsch

Good Thanks questions. for Yes. morning. taking my

So, on the could hydroxide XXXX is hydroxide? EV you provide on if demand I'm upward the to, larger the and energy batteries EVs, the of penetration just versus from to lithium obviously, as wondering revision revisions pointed outlook color here, the mix drivers. EVs if towards carbonate you density standpoint. I'm upward therefore to just skewed mostly and higher more curious tied forecast,

Kent Masters

Chris. Morning,

the in it hydroxide. relative the mix, to towards question So weighted is demand

at And on of XX/XX, -- XX% But If we by if look the error out bring it's XX% a about you XX/XX sort some And it of course. would there's hydroxide, to being hydroxide. look market this, XXXX. bars going you see today, split. value. be that to that the And

LSP. hydroxide doubling So large growth And the for in not is in is high there demand for carbonate and be to capacity lines. to and the well-positioned no conventional to chemistries. the in nickel growth is on it It's that's it And we rate growth is Because enable true growth which of see higher range they're we we're energy even that like coming particular, the Western technologies in for our way part know, capacity isn't as matter of The hydroxide for the XXXX. Albemarle have more density targets for is looking But goes. you in OEMs going product both incrementally of say hydroxide. XXXX in carbonate.

go predominance the X, just of towards As we Wave is look reasons I that at referenced. for forward, going roll hydroxide to the

Chris Kapsch

and last it. chain renegotiation tone about they now. Got to also. conversations supply which lift prices there's higher. maybe customers a the customers them like both shifted comments the concerns sort contracts of is the seemingly applies what back just over sort you EV also regarding Thanks. If security of of any to world the the given your given then it industrial kind suppliers mentioned grade renegotiated But the And right color that of That's six ability has to to And curious the just about changed months. follow-up kind perpetual the and leverage floor feels if the are a from in helpful. if on as of I'm your has supply? of contracts, three

Kent Masters

Yes.

then So Eric with mean, the the think I some customers, term industrial color. I are not and that, EV maybe I'll start in We're market. But for contracts gives the sure. mostly long

pressure contracts. direction. the we contracts, it's want but the that there's about will on to kind trend There's on so that the If in sit market the the it same about pressure. side. moves contracts, seen, that's Eric, you leverage we've that of And of I would EV -- say above spot less move our less term not there's when So that there's those no top has on but even long shifted, pressure off. those the talk I changed discussions. really continues, market it with but -- less the industrial we the know, tone And prices our don't is still with long term

Eric Norris

size characterized be that's would and that Kent perpetually The the only been well some add to contracts, as China. global others an improving some is in the index, but price from necessarily if those us one There's they Chris thing that TG fits is may spot. be China market. that them, as or a And Chris, area negotiated that's I of and Kent these have from are pointed And all, you've they index, if majority as into Kent, change. contracts And variety, are based positioning as going in market like standpoint. go contracts an the market needs. based that's that to as reflects vast going we're on moving to make and old the standpoint some be into variable are now, the the not restructuring adjustment, going be, customer we to like out, market to ago. concession there look did collapsed pricing growth going be going pricing And a benefit just these year a perhaps to a We

Chris Kapsch

Thanks. helpful. Very

Operator

Thank you.

comes Jefferies. Lawrence question next Our Alexander from with

is open. line Your

Laurence Alexander

morning. Good

So, guess two questions. I

the it a the Or when conversion is are develops? the and I whack? the the try recycling message some to double OEMs? costs, to engage are comments for recycling, automotive market market years? to And next position over First, yourself rising on the the when you engaging in significant or amount of that specs are earlier, R&D, at costs in returns falling can in Are some that is you'll like, extent? that the your development you secondly, trends speak you few mean, subsidizing to significant as change

Kent Masters

Yes.

to So point, there. role kind out But But recycling, I would that. trying process. get phase the talking business might be of I But think, model what model look of in to and investing really would it's R&D this R&D early us and would we're to in a look what an our like business figure really customers it's like. we're at also about on that. what And investing investing say we're we're

coming the is recycling the returns the the we're and no biggest of -- get question? So, number the years. another sorry, we be not that driver we're, waiting I'm that I there's that's kind going till lifecycle feed sitting don't second not And to for lithium we expect. of for And think to processes through

Laurence Alexander

are specs it becoming or conversion as the rising respect, battery specs? is evolving, with those meet or to tougher as OEM the costs falling, Just as auto

Kent Masters

Yes.

don't the know processing So, evolving. are specs I costs but the going are mean, really I up. And

of But meet cost But in hard modified costs in up it that's it. think order driving sophisticated, process some the some our don't cases, on point. gets this more productivity try around control. making specs some of are we the and down. to of at I that probably crystallization. productivity those it's we're about offsetting but So drive to lot better gains. driving steps as at A get some There it's we've

productivity. we'd cost, that have with of that are add looking which I one at a at We to would process the step little would a in, bit minimum in but think our offset we we add

Laurence Alexander

you. Thank

Operator

you. Thank

Mike from Global Seaport comes with question next Harrison Securities. Our

is line now Your open.

Mike Harrison

the about morning. mix the good XX%. flowing directly bottom your and through Hi, Typically, pricing to down Wanted pretty I line. you was said is lithium to ask pricing business, think about

been And EBITDA only $XX down so headwind. million. have your something an would million decline $XX of like was that Yet XX% EBITDA

make up doesn't significant make how would that like that you fairly its on big volume have It look difference? own. been So did enough to up

Scott Tozier

This year-over-year seeing is is from There of we're results cost to. point volume a also on actions the would I in would basis. our I the Yes. quarter a But perspective. productivity growth Scott.

XXXX our the very both basis, get clearly XXXX in in the the of that plants. the yield as but we'll benefit to that trying And fourth in enhancements a that we're us quarter. of And we're so, on volumetric well, And just have that improvements seeing only the that low productivity, out the are to cost have seeing some see cost benefits world-class we're able and as also costs, and started growth engineers resources the maximize of we that's been but give not operations. big focus low also from

So all us. in direction the for pointing right

Eric Norris

that they And volumes. those to that. mean, in more much improvements, through, it's I productivity difficult to flow them That flat add would get mean

As as up new really which But we facilities, get be again. the show more. those grows, of really there'll on start redo show up. playbook But productivity I will to volume volume kind then growth, those think

Mike Harrison

Understood.

your with of that customers there happening kind where going I for Or support over because mentioned customer customer? guys, that little a are a order you changing forward? you this side, affecting the catalysts as play then a see And you in of on vehicles. de-selected this other on coming you customer to the one-off Okay. cadence wanted into the the see year. maybe Do of dig patterns bit specific But electric

Kent Masters

Yes.

predict to kind we're going at of So get to but difficult gain their view kind future, see to of But taken the pretty work we kind that the customer one confidence they've hard back. and different And moment. of a exception. customer took as it

Mike Harrison

much. All right. very Thanks

Operator

you. Thank

Arun Viswanathan RBC Capital Markets. from comes with question next Our

is line Your open.

Arun Viswanathan

for Thanks Great. my taking question.

the a some markets. you versus year-on-year overall we XXXX guess, improvement be pricing, that in little I Just XXXX. in commented And pricing down curious maybe, would on have pricing in outlook, initial bit your certain seen

if can maybe helpful? America, and evolves thoughts how through us both see on Thanks. there's carbon be So, maybe and your price it. regional hydroxide as give differences And you year you and the that'd China North just any between

Kent Masters

comment spot But seeing a make I'll we that add around can and you're see Eric some think numbers I color. I So same mean, the prices.

So they have moved China spot prices.

So we China little-to-no volume in sell on basis. a spot

really of So prices on discussions for contract I'd we we've of the indicative really pressure haven't it seen. not with market. change But said the China it's not But customers. as directly it is seen earlier, our applicable, but lessens outside the prices

seen, as during So it to year, we below still prices. the how are quarter year. see downward not At second quarter, spot contract the spot have pressure, of turned third had of up. just out last the prices But plays it's moment, have we'll because prices our much as say,

continues prices. at So move, still it's the upside. give those are not some our If us that it moment like prices a to But contract could sea change. below

Eric Norris

the that. carbonate, products, pointed so is largely our outlook. most an The early extrapolate ex And business prices. Kent battery in China It's sign, and have to bit in of early. and carbonate which And And its are in is prices relatively grade China is prices biased add around our around or out, months. seeing to I'd outlook It's that TG world, hydroxide, in encouraging inflected not necessarily a bit more world. as you're flat that largely past to a the two but to and China

It's benefit good should continue continue from we'll way the So and And deepen in broaden And inflect when. just time watch encouraging contracts inflect an not today. it it's position it's to And we've it. from trend, matter our got of that going a forward. say sign. over we're we extremely then structured, that -- prices just of to a upwards, year. would is are matter matter I of a transition where if broadly, a it's XXXX

years think forward as is the tight. get pretty we to go future going in I

Arun Viswanathan

that peaks maybe spodumene is towards And to on you saw expect pricing to Thanks. for as that going XXXX it your we just you kind that longer can little thoughts Would XXXX? on term, offer a also relates Thanks also And well? maybe of you get as and comment bit in head back it detail. could pretty maybe Great. tight. you noted to prior that

Kent Masters

Yes.

mean, this is I were the that. And I anticipate peaks to So that so we through we're We prices industry before, really they back down say the only future, we're cycle, predicting been don't one would but move don't that right? know coming that. off

that. I at I'll leave So think it

Eric Norris

-- -- China, and spodumene, what's have shortage carbonate fundamental inventory. of the are available inventory spodumene On in reason we China really in Yes. -- we believe and what's prices happened a because is spikes now supply available

prices have calculus what's more that standpoint, meant market from started given continue the and into spodumene, for future chemical is market, should meet to that So provide will now need. maturity watch. a which that continue, upward say, all supply grades to this of inflect to What hard Kent means the that as said, too we'll that trend to

Operator

Thank you.

Our next Morgan Andrews question from with Stanley. Vincent comes

is line open. now Your

Vincent Andrews

slide, MARBL of Wave that And bridge eight just you. at from was and between you're planning were when to just the LCE Thank two split stages two with going to to of parties. it taking Thank be the tons like XX,XXX of at back Wodgina, Wodgina. plans wanted slide did build looking at to that still do you on billion question. Doesn't $X.X the the JV. X I you you my for sort seem going

$X.X approximation as good relates would So billion in that Presumably, what's what cost still changed to plants? and why? it of less Is a number it's than XXX,XXX Australia? China. it ton And that

Just help that'll us if very just that he helpful? bridge could be

Kent Masters

Yes.

guess it the And -- second be MARBL the conversion we in I evolved. second and projects. probably I/ in facility the that And So I have that conversion II. see plans Kemerton that would first the project today, around would talking mean, JV the the so X XX,XXX But China. be our were initial about is as we Wave

Vincent Andrews

correct? that's But Is to the that you'd in Okay. going presumably, CapEx Australian cost that than envisioned. come less

Kent Masters

Yes. Absolutely.

So it'll Western than a be quite less Australia a plan. bit

Vincent Andrews

that? some Okay. mode point can is to leave is Wodgina right it believe plan like And bringing in Or Do terms anticipate of at and you the in I online this care what if it do ask, facility intend now? [ph] maintenance you the year? also I back

Kent Masters

Well, don't this about know I year.

So, evolve a accelerate how plans on. good to And we growth. on being comes Kemerton a project very then It's just mean, is quality resource. we as for the our have Wodgina we I see resource.

commit want need we as would projects, into resource So would top we resource. be we that-- to it But when when know X it's there. bring I don't don't to I the off -- and need phase these that that on. start

Vincent Andrews

appreciate it. really I much. very you Thank

Operator

Thank you.

Our from McCarthy next with Kevin question comes Partners. Vertical Research

now Your open. line is

Unidentified Analyst

for This Kevin. on Cory morning. good Hi, is

drilling. it As Day, your things have resource to changed. business, of at talked discovery relates bromine XXXX the and you expecting Investor about to offshore expansion Obviously,

And how talk can So more view would you about bit your expansion? changed? the bromine little market a you based U.S.

Kent Masters

Yes.

know for muted I oil things business have little good prices think But with going going nine of our a view we to recovering, six is changed slightly, of months offshore I which to we in bit. of oil the see terms be think market, do the our it's time lag forward.

example, fits us. We've for growth for the and lower intensity, Magnolia, accelerating the of to jurisdiction higher corporate it terms expansion, know forward. those we capital well. projects. lends U.S. That those business it's right And there have In return. decades. great that assets to as for really itself along strategy been of this the return we leverage a going ones And higher a grow return investments are quicker we'll

Unidentified Analyst

lithium expectations and aggregate proceeds consider And And It at Do recently, would on you're business close divestitures. separating pivoting you you. some equity the catalysts. I'm catalysts performance Thank raises of of any have you like sort regarding point? timing? up, if here your recovering with may balance and follow on sounds

Kent Masters

Yes.

crude refinery of becoming time. that to that best deals -- and remarks add Asia you a gone and like signed. taken kind owners have as So, as get closer yet. we're get owners were. business. kind still utilization, we're prepared to chemicals or issues. of We've we that the innovation COVID those when in been more mean, the the We've business those let have we think no miles we the we we best slowed COVID-XX and said still done all know business. moving down we for think But I over On mean, the same we'll think track, of And say, value. And that products that toward for being catalysts, the we I of of business not in some today. We still the driven for we're that on and we and but on I'd back slower, We in we in It's we're the FCS track PCS, kind like down. strategy But we they're us that we're of hit move.

of we of don't businesses. us. around our are Three have portfolio have for divestiture in catalysts. immediate core part we all They plans So core businesses the are

Unidentified Analyst

very color. for the you Understood. Thank much

Operator

Thank you.

next Our JP Morgan. comes from question with Jeff Zekauskas

Your open. line is now

Jeff Zekauskas

much. very Thanks

takes vehicles to than before? XX,XXX time two on up. base bringing And you tons know I said to in is stronger really yours, you XXXX? period, XX,XXX in demand as on the strong those many over of you're three-year going So bringing thought for be do a out Negra. You're ramp tons sell of much units people which electric La expect XX,XXX to tons is how Kemerton, that at case, it

XX,XXX much XXXX? in the base of will that's yours, XX,XXX and as So the sell a case, how you

Kent Masters

in and we'd detail the be as That's on at fair. look those them expect of bring plants to I of to want ramp selling you half each kind think if we Eric, on would the year. that, Yes. So, up, first

X, XXXX. of Greenfield, Negra at have infrastructure made this reasonable. part is up place in existing -- And other the the facility plant Kemerton feels that in for La XX% a prior to much And growth XX%. acquisition look example, we've time we've of we with was considering that. Wodgina done little -- with we that Wave from one Brownfield it came But you as same II. Jeff, well, a an the If before of obviously, north as mode,

Jeff Zekauskas

correct? my for Wodgina sleeping. there in either has other -- XXXX? And correct? Talison Because the any is effect that that rock for And Right? is benefit from not is what's these And the I come mine on to projects from is XXXX? Is two Greenbushes. the or EBITDA of guess Or follow-up, Kemerton volume -- the on

Kent Masters

and to think be most phases costs. But it'd initial And increased Talison be were with I see Yes. get on. could the because if we've I to accelerate initial don't and much costs, if going will we those -- And commissioning, planning product. we're bit -- mean, we is those the got sales, feel a XXXX. offset of in little on likely you're XXXX. initially I by from wouldn't in -- benefit Kemerton that bringing

Jeff Zekauskas

so you Thank much. great. Okay,

Operator

you. Thank

from Juvekar PJ Our with next question comes Citigroup.

is line Your open. now

PJ Juvekar

Yes. will on than secondly, XX% Or the XXXX, of certain Hi. contracts those Good time And it's in had that morning. Did of those higher think Currently contracts? in happen comeback then sort And on that's that last? to China, hydroxide because XXXX. just you prices, LSP in the contracts a original back given Do you the carbonate trend? the was prices of anomaly pricing, pricing. on may batteries. go are expectation an that concessions not

Eric Norris

producers by not Kings low at supplied and volume historically delta trend. is The the supply, Eric market, that's which We what longtime of marketplace. Good It's And to lot market, carbonate two do is inversion buck on is -- So hydroxide largely Albemarle it's the hydroxide, enough question, a Mountain. lower. a without carbonate that which hydroxide for first enough dislocation rapidly carbonate the we a of being PJ, historically is there's important here. that of converting than to higher not one, or which there's think the morning, is not and brine a China understand carbon a responding market on cost of

say there be is go the point to to to incentive producers for economics those that So the hydroxide. that has that

what obviously very participate. to that revert was product to well-positioned expect we are please? lines So and second PJ we your both again, question in

PJ Juvekar

price expected So have the in they XXXX in original lower, were to and back contracts were XXXX? go to that you reset

Eric Norris

had -- done. we recall we've what what Well -- what

What based the reference migrate of upon several customer. recovering we'll part, price, benefit of have has strategy we to either price. the are we And have and over ones or them do depends contracts market market and going Our remainder to from been a new struck this -- these all forward. converted a on year -- it we of the

strategy. our that's So

benefit price, the for to are a price to to But the structure aim necessarily, we Our in of strategy there market back prices, how one-size-fits-all not some inflection of in So to take those although contracts. go past, that, it's the who answer. of is terms a recovering a right? not from are in fixed advantage customers asking

PJ Juvekar

you right, So a contracts Eric, price sort on maybe annual if more to like heard going variable opposed be more saying or price? fixed of I that your pricing you, are dependent as to

Kent Masters

a I That going will is it's they fixed well That some market. vary. price We're not Look, of is can unless above segment is correct. customer It the customers stability. to price, a base. you But want who of give well agree to want one above. examples today that that's the

spot-based that much a customer and use to more less term, likely commitment them how of the large be, which going commit expansion. them to justification to a a in Another long their have they and of their segment for supply to we to as flexibility buy. variability -- part some market-based they're to result, volume, or of able collared say with And contracts marketplace of the component kind relative for well. of make The our also give that part part will a big volume. that those other their chunk, we want a or competitors as them, move for degree to sources The other either to as dictates that to we're or wants

we're price some allow So improve but there all recovers. the a going are market this And overall of and how is caveats value our mix to that's our as on there price believe, really basis we proposition, things. to profitability in us approaching

PJ Juvekar

you Thank Great. for that.

Operator

Thank you.

Our comes Sachs. from Bob Koort with question Goldman next

is Your now line open.

Bob Koort

MARBL you very wanted plan little how explore, integration bit more a with expansion. I to your much. Thank you on the lithium

kind you pursue What a you accommodating markets in fund MARBL Why concert Why couple with with the to the now not the the it transfer keep And the expansion, from financial there. Kermerton if all could it? of equity XXX% MARBL to questions expansion share your Chinese price that get JVs. And So have of will why wherewithal that? be Talison for shareholders? --

Scott Tozier

Yes.

on answer one two and then do in that of part agreement we that JV. China. So would XX,XXX is in short the would well, original the to would be I And do with that the tons, next one that's expect of say our we the the

side, done get the -- to the cause expertise side, one, expertise because they bring mining was on on that. Wodgina on resource mining the processing chemical And to JV mine, we So side. their the we're have and for help the us also expertise that our more in we

logic that's part did we that's kind them. the with original deal And of overall. the of So behind that

doing So conversion other project we're to committed them. another with project,

Bob Koort

is Negra III Negra structure cost a get if maybe I the also, could La thermal of versus use the in a to answer new then And Okay. there on Talison. from cost And price out Can II standpoint? from curve an does IV that transfer talk the to capacity your La project about you evaporator. and already what I Thanks. that's going and

Kent Masters

Yes.

Australian price a it's So tax transfer on that of rules following I price, were around established kind we the mean, market that.

was I a driven -- then market as arm's thermal a it's project around much But that. that's the And so mean, just a market say transaction financials. return price, sustainability. probably would it's by evaporator, it length I around And market

also returns good. benefit much recall that that from think where tight. were without we But before. well. were were. to exactly they cost don't less or the water I what I it I And And that's water the So water of as is area extraordinary. than us using -- operate a sustainability was perspective allows don't they the an were know then around

Bob Koort

Great. Thanks very much.

Operator

Thank you.

Our next Fargo. with Sison question comes from Mike Wells

open. Your line is

Mike Sison

good guys, morning. Hey,

growth? sort pundits forecast. on industry do the you XXXX that Just how And one sort have by by support to to in then much of hope that quick Do XXXX online question can of believe support on capacity then. the your you

Kent Masters

the I for can't think I speak the I -- industry. mean, So

see the was kind this of have us acceleration talk XXXX. part of number that our that's Eric, adoption goal in in about what toward that plans. has my accelerating we EV in maybe maintain I we want So growth head. you of the there. in as And don't current pivot share our kind in capacity moved

Eric Norris

the middle for it's leadership that thumb of our earlier, think part market our already hydroxide Wave We an about with growth, Wave require market. capacity get decade as growth. rule comment a It's to to the think I And and going plans sustain put earlier X way be the Well, to we to and what going on at forth that to for weighted is grow to and in the X bringing of question. us least that XX,XXX a hydroxide. you that of And tons plan. year on the

decade you beyond. enable the into would and middle If details of look the at a

the tons bringing So speaking, at. a about are price, looking XX,XXX. we're pace in of neighborhood, the approximately Mike and XXX,XXX you're market year That's on growth or that kind talking of in

Mike Sison

Thank Great you.

Operator

now call session. question Thank Masters and Kent to like answer for would to turn I over you. the This closing concludes back remarks. our

Kent Masters

all core term Joelle. capitalize well-positioned Albemarle businesses. our you, on three long Thank is Okay. to trends of In growth closing, for

including strategy our and operational we communities. confident Albemarle you. sustainability growth. We We the building our aspects means discipline customers project our and on health foremost, and well capabilities remain chain, continue to we the low-capital to first will of built That employees, accelerate intensity, and and position time, control we experience. focusing in for execution also success. business higher-return modify of execution, Thank into have customer will can same manufacturing, control. At what and to being supply means, It the capital all

Operator

this participating gentlemen, disconnect. Thank call. now conference You for today's and concludes you Ladies may

Albemarle (ALB) 18 Feb 212020 Q4 Earnings call transcript