ALB - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2021 Albemarle Corporation Earnings Conference Call [Operator Instructions]. I would now like to hand the conference over to your speaker host, Meredith Bandy, Vice President of Investor Relations and Sustainability. Please go ahead.

Meredith Bandy

All right. Thank you, Olivia, and welcome to Albemarle's First Quarter Earnings Conference Call.

under after our of non-GAAP press to Web released and market reconciliations were at our find section you'll release, site earnings the the close yesterday, posted albemarle.com. Our Investors the presentation and

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

outlook, in guidance, some accordance also during Web measures that prepared GAAP constitute As our our can Kent. not language to language a our in site. meaning of press contained this refer call presentation, to the these to the divestitures that, turn laws. proposed cautionary over made call. both some forward-looking securities reconciliation And found which forward-looking today note Please same the may the earnings of applies this that measures company reminder, call, expected release note and are to of to our I'll statements within of of projects, financial and are and federal measures posted appendix statements of that comments our Please with about the performance including expansion statements financial release our A with and GAAP. in be presentation

Kent Masters

discuss customers us results, today. XX% business. generated million, favorable Okay. allocation. accelerated solid of orders long as bromine with Albemarle Scott adjusted million and Thanks, agreements and business. Meredith. as to last our and in several today's We on income term strategy under more for call, net On all benefited up mix us a will year. EBITDA was lithium Good detail our in to well from $XX I our will creating joining thanks sustainable of accelerating morning, part accomplishments This and our quarter financial as results. volume that and capital and customer strong it for We $XXX from another more highlight recent give outlook you growth relates

We strong demand continue lithium, for from EVs. to market see especially

sales remember EV European by in and quarter provide are on maintaining said, sales and significantly. that that versus year. are year, lithium. led First Therefore, full last out for were will we guidance previously up detail Scott also North All bromine our sold in reported this we China. were up few additional just minutes. American the XXX% a company

III, II plans growth made II, to are projects. our I, year. progress with IV and Wave beginning our volume These at advancing are La expected add projects, We lithium being Kemerton Negra the two next

offering first our you to achieve completed probably then As debt. $X.X two successfully reduced the billion are aware, This enabled equity and we goals. during us quarter, strategic subsequently

expansion. further our track provide year. and will ambitions tons III added to high for This completion Wave to growth construction, rating, resources. was we on two world First, growth Construction for our positioned we And execute our and recently to now our X, Compact, a XXX,XXX return this facilities bromine. I production to and enhance of our our to ongoing of capacity our final to drive These support volumes earnings ability increase two well projects rating S&P say grade by at the signed second, capacity from credit projects stages which stakeholders complete, worldwide Slide double BBB update Kemerton, corporations those upgraded in sustainability. when and advance the Negra maintained lithium have much on Global. later are that to on have and joining is projects want metric also to to lithium class are year. we the expected per Global nameplate investment UN efforts On proud will La needed to customers' conversion are you I'm

are we expect complete, six commissioning not schedule. into any We Australia to and Once final impact the closely, Western our do about typically situation move months. takes we labor currently, customer but watching qualification, which

volume sites lithium producing projects in will capacity. the begin further XXXX. both to Wave from of focus our tons II two execution Wave our These III, commercial complete projects and to metric team of XXX,XXX which expect represents We on enable conversion

projects the a includes We as compliance data reserves year. I full or expect as to a would decisions Energy Chinese in China has the that middle mention is from greenfield the the our potentially investment on make site of Chilean like This plant. Commission, acquisition report provided to and III additional of early we this the first Nuclear conversion in that resource following in CCEN, Wave confirmed January. and

to committed are are the resolution obligations world, pleased with and a we regulatory complying reach to and around with We satisfactory collaborative our CCEN.

to results. to Finally, in we of our the over projects benefit accelerating the see bromine, growth Scott the quarter and review turn to beginning are in first call XXXX. expect I'll now projects these

Scott Tozier

begin happy the Thanks, X, and to to a start on Kent. strong I'll report I'm on Slide year.

excludes in GAAP mix $XXX debt the volumes from raise. repayment core our XX% driven when our within incurred quarter, March we For across our $XX we delevered million. following the equity This sales we income last Adjusted a three net cost businesses, well bromine as year. of customer generated a was million, first unit. EPS was that favorable of $X.XX net of as early increase increased by

to year, $XXX Our sales us EBITDA XX% of early growth for last up adjusted start us the giving an full from year. our enabled guidance million, generate meeting to

bromine quarter. up tailwind. Lithium's to inventories drew accelerated million versus in and QX lower carbonate hydroxide cost demand, by business. to To turning due expected orders a lower as technical for some expansion. first pricing EBITDA grade customers in adjusted meet stronger total for lithium realized $XX grade down Slide this was year foreign XX% carbonate and exchange prior X as Now results we adjusted Average EBITDA year, into to at over down resulting a and and the margin thanks battery increased pricing. look was the last $XX million EBITDA Adjusted

our increased X%. increase volumes sold Market Gulf Pricing was limits adjusted However, are than $X strong XXXX. And million $X QX offset the by portfolio. volumes difficult out, strong reduced quarter about lower grew also increased US just higher, million it winter in to very favorable storm. and we sales a making The to like across compared XXXX, about plants down higher are storm but from of sold for in increase an volumes the year, remains bromine our due first in the product and ability customer of which more to the EBITDA to losses Bromine's offset price. our quarter the by demand was The in drew cost lithium, large related production to inventory part mix. production Coast out the the quarter. primarily plants

time declined that the Texas. We costs, expect and electric and adjusted production Bayport due impacted production and lost sites increased QX incurred million, impact frame. to which $XX Catalysts Gulf totaled EBITDA in QX These to storm, Pasadena, downtime repair in expenses production see primarily the gas US $XX the million. and from Coast winter natural

this been Without adjustment, XX%. up results later corrected which $XX catalyst last was for quarter. our and million an period Catalyst income this storm year-over-year that comparison Our of the as further out included would QX complicates have impact, the of year from EBITDA

$X highlights costs. adjusted corporate million, primarily Our category EBITDA X Slide lower company's financial by due increased other to corporate the and strength.

interest to proceeds reduce With as we debt. were growth in deleveraging to billion short expense the we capacity able of the that equity our $X.X holding allow and accelerate repaid for as businesses, offering they proceeds approved. from us term February, bromine funding lithium create investments debt the our cash, are By will in instead the the and

Services and dividend maintain We are to increased would the our investment shareholder grow for On returns, look which we for our million. which our year transaction of the track expected quarter also Slide a of we In modeling into of speaks given proud record XXXX. we I Fine of dividend the We've breakout guidance half to XXth a Chemistry FCS our $XXX to how consecutive see includes we our and like to note to proceeds X, purposes. for year provide the The second that second an our February, at rating. is a grade on of can the to ongoing in company results. are guidance You FCS year. close business sell approximately guidance full our maintain. for agreement year, entered for a commitment for executing credit success

driven outperformed mostly for do expectations increased increases we've lithium primarily demand. a quarter, and because quarter-to-quarter lithium. accelerated to outlook of the mix. year upside and mostly three over We are we favorable As the businesses customer bromine same volumes by see next don't excess the customer can not have orders inventory meet bromine expect full our quarters, our and in shift businesses sold but lithium out and except to unchanged, orders effectively the for modest for is from Timing discussed,

monitor chip bromine. continue for We the to lithium at automotive shortage to manufacturers impacts and

prior an the production X% not to IHS shortages year-over-year. chain. issues. still impact. position be may supply XX% is related be our In their due from and expected so supply EV This seen down we've XXXX forecasts forecast microchip production far, revised though EV And up in to May, to for chain

we The which the to expect investing to higher slightly year. is $X.X speak the out and than be to our the lithium are first quarter sold earnings to range, importance continue guidance We our bromine to to the add future company in of during for maintaining potential. full billion year in sales our saw billion demand businesses and last $X.X volumes and net

Our adjusted million. million EBITDA and $XXX XXXX remains $XXX guidance for between

expect II year to $XXX our cash as operations are the efforts be Wave III. complete Net to million we for also our and plan. tracking projects on on $XXX continue around Wave We CapEx from focusing million lithium begin to

EPS depreciation higher count as we to are inventories new progresses, expect year higher taxes. of the higher and and share cash commission for increased Expectations lithium diluted lower reflecting and two to $X.XX As the on plants start taxes, interest adjusted track, $X.XX we expense.

and guidance the on our our While company as XX. Slide changed, for lithium has has, total businesses shown not catalyst outlook

Our higher tolling lithium outlook added volumes driven lithium of for carbonate. to we productivity improved have the lithium some due has plant business improvements, and by

the year improve lithium conditions. the to the realized remainder will due compared year. be pricing to average year expect for prices tightening through to flat market We last Overall, of sequentially

Gulf in We lithium lower but efficiency related is EBITDA catalyst for total, continue to higher our high from improvements. down about be were to to outlook up percentage business XX%. is Coast offsetting due be to year-over-year single winter total basis, upside customer expected is partially projected FCC on The originally had offset be a results delays costs On now US this to and by XX% lithium. of a primarily units. expect startups, basis. project in storm we planned, than XXXX the we In impact to the expect the will catalyst digits This

the business for outlook has not changed. Our bromine

strong first in we make a be customer the up quarter, While we able future will expect production had do continue quarter. the very we quarters lost to and to the mix not not favorable first in

In are higher. addition, moving material raw costs

to markets, continue end certain to economic and continued expect year results construction, in and We due higher recovery to pricing. modestly with savings than and building including ongoing last cost improved electronics be along and improvements

to the to to have growth as EBITDA we the QX for full decline. our Finally, and have modest a in expect quarterly company, progression half second modest

lithium in XXXX IV Kemerton And and expect to catalysts recovery from that back I'll from to II. results benefit La sales accelerated will with Negra continue initial III, hand it and bromine, plans growth and I that, the We Kent. in

Kent Masters

Thanks, Scott.

As business in responsible disclosure the April, and I voluntary we Compact, leadership a implementation Global practices. earlier, for signed platform development, of the UN mentioned

our In initiative Sustainable to we supporting are in UN Development UNGC principles, Goals, largest addition corporate world. to the the the the aligning sustainability framework sustainability

sustainability are increased benefits public But the we've our Over updated advance and beginning by made I'm year, the efforts. commitments see pleased to a term report is, published policies long that to sustainability. past ESG Sustainability its we commitment. of nature, to disclosure,

Index. was Albemarle to added ESG S&P example, recognized For the and recently XXX

sustainability details be in to more Report our related Sustainability and expect on can due Annual XXXX these You initiatives other in June. issued

reiterate Now on I'd Slide strategy. our XX, like corporate to

on progress have with pillars. to four started We a quarter strategic make XXXX strong and continue our

volumes and are our XXXX. II Wave sales commercial completing for in generate those deliver We projects to and plan

are well plans customer as We our our resources on III And operational execute align maximum expand across as we to drive to with bromine are to productivity projects making on growing lithium focused Wave our demand. laser businesses. discipline

sheet, our dividend. around we work our efficiencies to we continue year within credit revitalized are $XX invest investment We to and productivity million rating improvements high expect of grade a this support will well improve our in balance growth, With operations. to continuously and maintain return positioned

key exploring remains as call help component priority that, a and our implement we'll our Sustainable open value With and top to proposition sustainability hand customers, opportunities the Goals to are to Finally, such these UN for efforts. of Development dedicated to and I'd Olivia. questions, us over we to like the

Operator

coming David with Instructions] And Deckelbaum question Cowen. the [Operator our line first of from

David Deckelbaum

questions I wanted conversion understand metrics using acquisition to to you'd in an right on looking expand that? about now? potentially help We've hydroxide we the acquisition looking that peers seen just facility. like the you at what bit weigh of of be up a looking around just Hemisphere. and things Can are a a think conversion scale your upon to before follow this capacity for you Western should of lot us and making acquiring How expand of your what sort sort Chinese

Kent Masters

a I and made this, operators standards. move at I'll detail But with some China looked them get then and comfortable to can feel ground acquisitions there. of we've the assets make very there, kind that to familiar and past some Eric at what need do for been We've time. very we've So comments, on so opportunities the you few give with we these are much, would the looking our don't to we're with we in pretty the if

that and bought be did and successful. We that asset we Xinyu. we consider we've So at very an expanded, to

got ground China. the in like people the comfortable. on We're We've we model. So

So we're be people facility our do a with able -- able staff new partially plants. from due good We’d diligence. to from to existing

like see looking in coming we the which geographies growth question as And was but the Asia, well, people we're of we being looking Asia So world. seemed And why see is very as growth be different part feel we'll we part we're growth moving the comfortable of a But forward. other still at around strategy. with And a in big ultimately, I locations then about at this your different it looking think at still as in geographies. strategy.

David Deckelbaum

by of just driven my talked industrial this quarter, And just obviously, perhaps increased you pricing mix of and about then on grade. carbonate volumes follow-up, greater

as should As we see making do contract we coming we point from that component when guys like about think online you pricing really late given as with the Wave think think a think a of think at delays about growth dynamic rolling, about you grade around II, greater into up should mix? just what Is increase of do we -- XXXX overall the sort we qualification, or battery capacity market? that how

Kent Masters

they maybe that and But think as I'll hydroxide. battery-grade piece Eric big let a timing around already I into material and So carbonate is the details, means get layer in. both

Eric Norris

here as energy Kent today relatively volume the and we split to is what business and So sit -- build hydroxide of just evenly carbonate today. that's between on said, our storage, XX%

have With in on a Negra still and it split La similarly Kemerton be have -- large carbonate. the one expansions will in expansion coming because on, we hydroxide on we

where that's our is. So growth

As go. capacity volume bring we on, the that will where that's

sales So volume that XX% will grow on basis. larger of a

that our that's rising terms in that it Now that's benefit on And market. given while pricing us this know, volume an will pricing, the under to had, made new as at now us done in of as allow to going the may exposure that run recovers. margins the well, contracts in security more benefit price through cycle, bring we're plants we're fixed our as strong give the from volume to evolution we've to you past. terms evolving contracts. supply concessions of we We've us now of bottom to those a will And market mechanisms and

Operator

question of from Joe Markets. the with next coming line Jackson Our Capital BMO

Unidentified Analyst

for on Robin is This Joel.

You and year that the inventories quickly much could industry reramping inventories spodumene lithium demand. in being overall capacity How your this total on talked about demand? you how conversion maybe what to can do see or own about see tightness industry mean limited rebuilding, talk offline meet you And pricing? meet you do industry for to in

Eric Norris

think in the is a the bankruptcy It to time, takes mines rising given some that prices, restarting, question come both are are there restart Australia back. ore mobilize to plant. right phase your answer into labor I and now that in particularly personnel still the some while still Western to short haven't went crisis the and Australia iron labor equipment

inventories demand you're now that's to the in but specifically why has short of China constraint. world, particular, That forward, going chemistry, so China. to carbonate a remain and growth foresee given industries develop a China, China is that -- So also the strong where the been of in going in around pandemic, quickly seeing in high is spodumene in development it's a post and why what carbonate have worldwide, like because prices under be is in That to of ramping quarter, starting some thought in recovering as demand, is rise for Chinese And going there to for is otherwise position the China. LFP we to come were be which do, and was on that in saw. the quarters drive minimum we but in benefit bare the not a levels a had the XXXX. growth during are pull you when that to into strong we'll first forward into We're in positioned would market well the opposite. prior normal it greatly what new that back to we quite be volumes limited we We capacity can bring quarter

Unidentified Analyst

follow a just And up. quick

I that to tightness. is reinstate rationale the tolling assume meet market So to

target from the XX%. Obviously, to you Because is? the now. term you closer of things just lithium Maybe margins I margin was what impact for those discuss elaborate trending previous then? tolling right temporary volume the on So are points. that and sub XX think is can Maybe can strategy from long that amount

Eric Norris

to we've strategy only us, that that strategy, is it's standards for on. there's when different the meet on ever III The something the done feel customers next in such Chinese carbonate proprietary. in adequate can capacity we bring case, relationships hydroxide bridging carbonate more with to take we been us in is always Tolling and IV a view that and that La year, that ready customer has Negra past, there and out get product, base a we for that this bridging as and because in revamped have supplied we

think So of ad convert It's per I hoc bridging. -- high somebody business a paying to, not get strategy. because not us something into as I to not lucrative, would of as can't is se. margin is But or it It us. a of the out, details you point we're it for for sustained as as volumes

side, So up it whereas right, we're towards right moves moving cost you're provide a for us to and does us it the curve, ramp normally more impacts on successful left next margins. But it the EBITDA, the the so that does year. set on incremental

Operator

from Deutsche with question Begleiter Bank. next our And the David line of coming

David Begleiter

the in benefit the was QX First, of what orders on Lithium, acceleration EBITDA? of customer into

Scott Tozier

I'm David, have in quick volume. the of a think it's take just me going let -- But meaningful I to terms look.

that. in probably So like the something range, it's $XX million

Kent Masters

to have way to Another don't you guidance. seeing may David, had know your that model, -- get have but I had may you of that, is

selling. not because There's second You half. little first may the we make, half very we're stronger to of than inventory. going much a demand, robust have And whatever had

similar for So a last business. even be or than year year the lot are they Lithium were quarters going the more to this

David Begleiter

for we how up La qualification assets? Negra on Kemerton processes, following commissioning about Eric, the two and And just think new these ramp volume should

Eric Norris

will ramp over So up time. we've of those a period said

to and of to on, nothing getting to we ramp expect depends to of it customers. turn So demand XX some us say, a first full that months and get on

think that it in way think probably first of that be year we months, demand of about demand probably over -- per best will some that's capacity to line, XX and expect or we So there. the but first depend on to XX% XX% the

Operator

of Jeff coming Our the JPMorgan. is Zekauskas next from line with question

Jeff Zekauskas

customers? that 'XX on versus lithium, pricing and that the in When that market you be or structures how current you the have might has in changed your bring structures is, That how new how in pricing XXXX, customers, today? has negotiated you charge compare contemplate the Albemarle way changed the charging your will capacity you your

Kent Masters

fixed strategy So commercial the about delayed kind been our from lithium We of some of for talking kind of the intentionally kind term contract. strict price a in shift time. we've conversion in long

the that the market, different market, we was conversion so have that ways. that. one we slightly more more a little think right We the bit of We customers of we'd the types didn't the market, because on was moves is of to contract negotiate different the delayed So at and it the down. with so that indicative market time of held far bottom off that

the strategy that and So hasn't new volume doesn't changed change that.

dynamic on we're think months, or basis. be moving be into go as we'll I So XX negotiating contracts will we the next that that through the new

would supply will So customers with year. that's the like of And security more intentionally really about with kind to didn't contracted, of we for still prices, then say, did the, the portfolio other with we who markets move And look prices market. with of fixed it a but price, bottom that and negotiate last market talking prices not move people want of more because we've of like will spot been be I that the contract at want but the we the implementation almost what the market. customers felt delay

Operator

line Colin Our Oppenheimer. coming from question of next the with Rusch

Unidentified Analyst

on speak is early how for Colin. capacity Can Joe as a hiring point challenging this at you ready next get bit on to you year? little bring It's to

Kent Masters

locations. two were I So mean there

so because got and a dynamic already. Chile in Western a significant Australia, and we've Chile operation different Kemerton, So

a them a but because we've Chile abigger And it's true at and greenfield able a people facility, to there been So on hiring. location, such not the COVID. issue different on, it's existing is But training moment with them is been challenge that bring Australia we've little we're in staff. in bringing

the little We’ve market, operating with chemical than well. labor plan. in dynamic been a is doing the In happy it different it's the construction the market in We’re market.

and So to hire ramp we've staff according our to plans plan. according facility up been operate would our that able the to

So is actually construction and complete to What's challenge not impacted a that getting do able labor staff And original with more we're in to construction. just been us. were trying accelerate that of it need we market but of the the treading kind hasn't that, we we're plan. water our to

Unidentified Analyst

a switching then bit. And gears little

speak pricing, to of Beyond you long given negotiating to other improve better your any elements position? can term what contracts working that you're a like seems

Kent Masters

it's Well, mean guess supply, of that Pricing I but about profile Eric, it's big and I guaranteed have… elements, part that the liabilities. several really of a the is you supply.

Eric Norris

our the of play to the that say that's on key. a the consideration of And down we many expansion offer supply as vast been for that. value the dialog, road have other localization. based. has in the lot then would the still -- now business of of down evolution strategies And well because we where And feel as we is the of sustainability. Sustainability the is to I can road a customers is referenced big location majority today how the Asia we've our

who Index. they is become sustainable these ESG very what As thought the and involved COX XXX about it differentiated value part shareholders of factors, in calls And being S&P on are in are what that means which through regard. we based more much We has Kent other OEMs value. what talk doing, want suppliers the of described in lower to proposition, call their and have real

with me, For a about paid it's value and our customers for proposition driving it. getting

So of well. as that's become proposition our part a big

Operator

Morgan Andrews from Stanley. Vincent coming line of question next Our the with

Unidentified Analyst

Angel on is Vincent. This for

Wave that you lithium factors III, before and of you Just curious your actually and key the are capacity on both FID? announce gating kind for see what bromine

Kent Masters

key? the said You

Unidentified Analyst

checkpoints The you factors the FID decision? guess, the want primary, before see you what that are or key to actually make or things gating I

Kent Masters

I So we're projects, that. at the for in them, identifying designing plans mean looking

in program. expect a see So anything I investment would you to guess normal it's

mean an sure about making the I that about up. that up would it's we've we we're a permitting, we're that process workforce. designs, line all And looking at like. the that's deal. that. to of returns resources point, relatively So get But have when issue got We've that the location, lot you obviously, that are we would -- chemistry advanced see a not then but big the decision we at aligned you

Unidentified Analyst

bit. then I a to little And guess, bromine switching,

You talked mix, I I forward. could One, going on that little kind won't not bit customer, guess, And in and favorable why more of think the a give as guess, about repeating color repeat. the you about we that then us it XQ beyond, and higher and second shorter production and should the supply headwind lost kind because expect of kind half or we raw pricing because materials Uri offset to of you mentioned? bromine of also both the of

Scott Tozier

quarter, I overall was market short. would start, and first the maybe the Netha can add some relatively in additional color. bromine But

that spot the have condition of But kind to of advantage Netha, get in you the not opportunities through market nice to some upside. of that maybe, us rest and take We're some gave it expecting specifics? the year. So continue more

Netha Johnson

But chance to second based that expect demand at a that very We good unique year. year. rest same on raw QX up the the going you to and and like and and do just they'll business had beyond materials that's inventory recovery, our to will and businesses, question, part don't of for are out opportunity we of to other your second described, look us as half a increased noncontracted of the some for Scott market in that as volume continue forward go our customers of impact freight industrial pricing. Just through sell the the the

Operator

of Bank of America. line DeYoe question Matthew from with coming Our next the

Matthew DeYoe

EBITDA through as of as you're takes improve we also the sequentially price it Lithium and the like up. XQ. little move to talk seems [here] for but Can from on the XQ a understand move kind are transition to year? guiding bit puts costs about But I sequentially we we

like So how off? would perhaps you ups that expect much roll cost do plant new and to these start with when incur

Scott Tozier

costs timing incremental kind of we're it’s those in in. range all second depends So that the the at from to on half, million that's come something in ultimately. range the those what of of million But $XX the of up plants. It $XX looking

terms look obviously, ability of there's limit puts in some a So additional at our volume. you tolling. of and as out the takes, We're to getting supply

ultimately comes Of course, lower a margin us. at for that

So margin drag well. perspective from a that's of a a bit as

Matthew DeYoe

And to on COVID you XXXX, late you don't made to comment back a expect then XXXX. before that get levels catalysts, pre

just happening? all there? there Is your that's is walk just that or you driven can else So through something assumptions miles

Scott Tozier

it's you Ultimately, them. as than others. additional the Raphael, coming are to market can of maybe, that color our our customers telling from specific customers slower provide and But are some the what parts

Raphael Crawford

So there's play. into I them different utilization. come recovery in a big pieces mean few I is is one driven refining driver of that a of miles think

already recovery. to usage into see -- business have and going we'll see so think our year will refining the an I is and year, we're our about FCC, to utilization, see at improvement that have that in throughout FCC a you'll effect and of XX% big the starting on next that's business, refineries

start yield, capacity, business. assets. have uptick products we our through high that's near very we help performance. maximize pushed throughput at geared XXXX, maximize in the running are business of that's or in on on On refiners lot A much when our to refineries. and the of timed them turnarounds out because business is When that the really in towards value when their that kicks until business, The is an portfolio we'll HPC CFT see with that's been

our to effect see we'll in it business. the as that So recovers, leverage of return start

Matthew DeYoe

their because And seeing now, through just across mixing so refiners… the down some catalyst mix need people the of just right utilization don't you're

Raphael Crawford

volume impact think statement. we to recovers. of and those a the mix reverse We but as see impact, world fair expect both I Yes, a a that's

Operator

line RBC next Arun of the from question Markets. Our coming with Viswanathan Capital

Arun Viswanathan

you pricing of or Maybe you $XX,XXX scenario an I'm I for in just just $XX,XXX where year? outlook Europe. as kind your getting say back into hydroxide. what environment Is you're continue there range? robust the ton well China. what per to for curious obviously is of that prices to seeing, can you comment guess, on in recovery in markets There's there as to in lithium been expect next some Do kind see

Kent Masters

it are too clearly hard in on for we're it's direction. so magic And those be seeing follow to mean, much we but I the demand EV what growth But going you're be the may that's going XXX%, extraordinary, the growth, seeing continue. that comment is price. to the to XX%, market that. XX% -- around question. but lithium demand mean is is and It's the expect it's to not levels, year I moving the

a there. contract has so moved quickly would spot quicker. demand to into growth market it translated market, that's China pricing in fully because So hasn't move going And the That mostly is be very yet.

see Albemarle. It's has future, to So it we the but the the into that to, prices we And translate what's be started predict in that and into going a and see we time. will moving what's contract positive that over hard prices happening up. happen direction moving spot in for think, to out market will that

Arun Viswanathan

of with a of comment couple to you now their kind just A back term elongate quick you come customers you environment of with requests a customer or of XX ago, your years seen -- times. at on lengths can maybe follow-up yes, the then. from you contracts were as contracting maybe years to perspective. discussing Have just kind seven, And contracts

Kent Masters

I a add view. say of it's We've changing changed. the same Several still to of the really start, bit hasn't way to Let would it's cathode involved, areas, that. philosophy. evolved then philosophy were and coming some nature. we've I still makers, of really it's in OEMs ago, have me years are are we mean, of and that our our around but now. say, I think detail more adjusted with OEMs kind the now our and getting three they some talking a And battery it's bit. but those contracting kind OEMs makers all think Eric talking on because I a to I thinking can the of would structure, across And customers But longer-term

term. I the pushing kind -- contracts, on So the three don't that year that. discussing. But know five I year, those about are of the the don't us know but that's nature further than maybe year, we're contracts XX longest seven anyone's of

Operator

with Aleksey the next KeyBanc. coming of Our line from question Yefremov

Unidentified Analyst

currently recycling initiatives on far? so Paul Aleksey. lithium us is This you Could any on for update

Eric Norris

in at investments who, Recycling is technology because their because underway we through a ups from just that value underway recycled good a Kent us customers got as indicated, going relationships OEMs are we for some some and going replicable is we've activities to a standpoint, both of that looking We've us and a part platform growth have. start with knowhow the initiatives are to key with made our forward of as development making from partnership will increasingly We've partner. from amount got business be come streams process. have lithium the processing

these a the which for would that at We effort view names. like growth a divulge development are forward. a agreement, play critical currently so can't it's going stage, confidential one pretty we’re all All as our this have future with and one resource we this in. prominently We doing customer. I But joint comprehensive to

Operator

from the next Roberts line UBS. from Our of John question coming

Matt Skowronski

on is This Matt Skowronski for John.

of you an frequently lithium expect off you're contracts of that mechanism does some contracts sort When contract pricing believe your you some be these your the majority typical for and majority last price on variable mentioned Going to question variable adjustments? index. mentioned how a call, allow on tied do price based this And based the of I of have Jeff's will contracts. of the restructuring you eventually earlier,

Eric Norris

the the year. clause mechanism. this of plus expires of contracts during legacy that, gave price a our year past right, some the And past, described course Kent that in You're the as during relief had, fixed crisis relief we on

all this by middle year. in end Some of the of the year, the

struck. looking to to it our fixed six in be structure and months battery give more the OEM that's time producers us and we'll it's any We've that price have contracts new new have with past that same the For earlier the move upside several for three, would that contracts that constructs. we'd both the basis struck to And legacy rise described market in automotive than freely will new the construct. the frame contracts, with we've under and price are they

important to one note, not Now it's structure. it's

who value the certain standpoint, so price And cycle. a returns from consistency. customers can we'll commitments a higher more on go are to obviously, we point along actually fixed them over with volume. And some that's get there have make price We our

On our component the who hand, we'll those have are of other more there. mix fixated on a price

will those -- little We of just more some be long more on discretion about a contracts. we go how

see, underlying going a of that to kind the message is there's a is to mix a we mix there so exposure be but market. And rising

Operator

coming Our Ben next line question Kallo of from the with Baird.

Ben Kallo

we when guys worry capacity you built back Scott, visibility that being and shortage new side, bromine, the not I produced builds And what know around coverage, see it's from semiconductor on the that are new as that's or lithium you top that, out is talk [benefits] batteries our there that? and if is you what everyone too. the side could of being sees I the on think that Just you? but gain how your guys can you on du see, visibility worry about jour, how yourselves and was just that enough on and the as then on EV there, chip a if on modeling far But

Scott Tozier

part that to with and the and we all added. vehicle get plans me -- -- know going and making on so of the focused that a there the our there's of opinion to what lithium about. And market we've We're we're I lithium of we got those let put goes capacity backwards not don't cathodes, the sure first and to building market. we're Those batteries. out being battery. second lithium -- investments lot then very investments, market. battery on with that an are got So provide part with about for focused that out growth we're that the on the model plans making sure from executing the we've to start capacity the that I mean, we our

that those from I shortage and market, across a the should how would the impacts So bit think about a lot I of projects Netha projects. a a, the the about little executing we Maybe battery comment capability and guess, electronics bromine all we could of space. but see talk in lot be chip don't in capacity that

Netha Johnson

Ben, to in as we strong. have shortage semiconductor chip being electronics see definitely year. the that not us. for good the we're is limited us of with leverage is electronics seeing Scott sold out, the chip strong market But the capacity A impact mentioned, But very market we additional rest really us.

volumes those have being volumes do ordered as we markets. we in So Those expect. contracted are

see really And that don't now. an right so issue as we

where from shortage. with impact now Now things but we always seeing the we're supply an the chain, change in right chip could sit not

Kent Masters

see -- part it's forward. just I little we your about was And question think an a bit Ben, of might advantage coming

those that's think really of going just I be to about demand electronics.

up Things, proliferation applications So advantage to with whether just it, play, that's advantage but need and where of chips, an be us. they to those chips to for more for or they able us, be of keep the automotive Internet we have underlying so an it's it in call it for

Ben Kallo

just of about know are flexibility could just lot, questions have but here. And I one businesses? the overall lithium the XX% done if I overall, the in. What guys of you about sneak And more three a

the think about portfolio do you So how altogether?

Kent Masters

it's portfolio. we've core So and three businesses a got

of and COVID energy really EVs was really, that, accelerated So the then And struggling then because driven COVID very market is clean miles the little as response vehicles. not the we catalyst the up saw about their COVID during market to and bit, held was through pandemic. there. electric really issues a strong lithium well European is from part and because the the Bromine

two those kind of three businesses, ties portfolio. that we fit all sustainability for together, the the for angle doing working part working the all but be of love mean So striking business is I pushing. portfolio all for will probably we'd to and well cylinders three I quite because piece think portfolio. on they're We that's They all like that and the down, we're is businesses. of into what sustainability cycle. a are that's and all it's one when businesses And us. key There's that effect other think them

Operator

of Chris with line Loop from Kapsch coming Capital. question the Our next

Chris Kapsch

to in focused on So my question more the business specifically. and industry visibility relates your lithium

are something. see buffer periods China how industry speaking commodity centric now or oriented the for of rising acute destocking the can But been comment chain has this for or the say as inventories application And or also copper stocks, the downward on build China when changing exacerbating pain right the your as with safety materials build on or I'm OEs? away in just is to is stocks? be could space, this that procurement to wondering point is from and just producers double the strategies, simply commodity could during dynamic cases, and to witnessed ordered side, has iron speak you the back or ability maybe you industry ore if industry visibility, this how the along of on So visibility some prices. migrating to evolving. in notoriously maybe currently cathode cathode in which So inventories in pretty are if battery battery lithium at the prices are this the you chemicals that, excess and what coming plus supply flip pressures. And still not Granted the sort pretty with pricing as

Kent Masters

up So I to with bit keep ton we I'm not more a have guess, I China. sure there's but mean about not fighting I visibility, a mean, -- demand. we're

think the same. doing is I the industry

down building So the take to more mean don't goes sold quarter. from demand or not the to in have inventories. I And any to I I in we're materials inventories as around think batteries, you cathodes We that Eric, know, supply building if from probably that? first they're and visibility perspective, advantage, satisfy actually the inventory building anybody's well. -- don't chain, our

Eric Norris

a tight, went out some the a around mean bad slowed in industry projects just of down consequence it got capacity not a how of of lot down. There's from lot just the world, and China but I market, regards up year and of in the value a No, standpoint. last is

So it's and demand a to up catch yet accelerating. take going is while to

in foreseeable a why China batteries, which give we downstream to building for forward industry. reason important the So number. situation, in of very see is anywhere rising out let price one the We delay the specific there's we up a China. capacity won't for future. If see it's is don't outside going a still

to Asia forward, bringing certainly point the important near be continues capacity. suits which in an where on we're term going So

very able optimistic on being we next to capacity that place about we're So bring year.

Kent Masters

And industries, And and I we mean ferrous standpoint into not different little and today China, in well. kind from base conversion is just have sure the lot that's resources effort of materials. a I are customer also really and of a in mining China. capacity conversion of making not demand resource as the ore, that's resource thing lot the conversion a one And of a we a the say than that from resource iron diverse spent specific. are a some the would all into industries other we China, integrated the

building see as Western So we're heavy you Australia, well. why Chile in us too China. conversion we're It's not doing in capacity in and

diversification think a So and a cases, we expensive conversion but as resource we do us important. that that well. in it's standpoint And on it's focus some for more basis from to

Operator

back the not Mr. over call turn I'm time. Kent would this any I Masters for And remarks. questions now further showing like to closing to at

Kent Masters

our to and again, and today importantly, Olivia. All most execute all people opportunities you, for we require Thank and efforts resources the execution, today. And have Okay. we strategy. the thank you discussed joining us the capabilities, on the

achieve us to accelerated achieve lower with higher capital to expect enable returns. should We intensity, which growth

customers. our look sustainability our continue to to but and the on we support call. not on continuing our by to speaking next forward throughout chain, Thank you, value you will Albemarle's within only work to operations We

Operator

gentlemen, for conference and your does participation. conclude today. that you our Ladies Thank for

now may disconnect. You

Albemarle (ALB) 6 May 212021 Q1 Earnings call transcript