ALB - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to the Q2 2021 Albemarle Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I will now like to turn the conference over to your host, Meredith Bandy, Vice President of Sustainability and Investor Relations. ahead. go Please

Meredith Bandy

welcome conference and Albemarle's quarter second Thanks, everyone earnings call. XXXX operator, to

were close presentation Our and after the released earnings the at section find on website albemarle.com. press Investor reconciliations Relations you of the release, non-GAAP earnings and our under will yesterday, market

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

As that webcast live some the website. the XXth of same note expected timing September made to forward-looking to applies outlook Registration available projects call. about a over of I'll the this during Also our financial finally, measures And measures. of the Investor are Kent. non-GAAP website. this of our language language statements turn statements our constitute the note now our Investor And also our webcast and meaning can Friday, be reminder, offices. forward-looking Charlotte for Relations press some presentation, cautionary morning section to Albemarle our posted on is company hosting that of of on release in Federal call including today presentation, Please from will both in Reconciliation the of XXXX be a which reminder, found as Securities statements may of the financial Day, contained the appendix earnings call guidance refer within the comments and laws. GAAP to performance expansion release earnings and

Kent Masters

Scott you I'll are give guidance. quarterly and today's you and detail the operating also thank our our support strategy. all recent on more will we joining for Good On highlight achievements, outlook us results to growth model call, results, introduce new Albemarle's strategic implementing I'll morning, today. and

Our improved. markets businesses well, execute to continue as global

which of million, two closed divestiture so improvement FCS to adjusted results. the of million last mark the EBITDA of compared was of June net only second we both quarter and on sales were that $XXX included quarter months Xst, a XXXX FCS Second $XXX slight Note quarter second year.

Excluding FCS, the FCS. to supply disruptions We've chain also part changes issued through also XX% guidance to we our in net guidance those you revised up few year. minutes. lithium EBITDA compared release walk in but business. a last adjusted financial for X% yesterday the was In our more year in performance, higher increased close, of to sales and after our updated reflect just Bromine Scott for reflect the full will sale detail year,

we to the attractive and We long-term projects next progressing recently planned our the III completed markets construction and growth serve. Negra commissioning IV, on wave capitalize as continue to stage. we of We La in fundamentals execute of through on are

Finally, I on customer value, briefly greater the improve model, that performance X. to see exceptional launching operating drive deliver and want you describe to service we and Slide are

execution. initiatives with about operational and technologies, and we culture, we our is talent, have embracing corporate principles lean model strategy efficient ultimately accelerate operating high stakeholders, AWE resource for allocation, excellence leadership as clarify and engaging strategy. the performance is The fostering culture, four ensuring resources natural we are Our Way projects, our operating connect drive and capabilities day-to-day we pillars, discipline and call finally, and sustainable Excellence includes Albemarle ensure helps on means us the organization. with model, serves execute responsibly the on a across operational managing an accountability approach, safety of prioritize AWE engaged focusing our based framework how includes or agile our right competitive profitable and deliver which and resources

XXth. detail at the We model discuss on more September in upcoming Day will operating our Investor

Slide to in We've in the of turning commissioning stage. Chile and Negra - construction X. are and III are La completed in IV Now

the by next leverage to beginning existing with commercial project trains these producer of that This first half our two allows of carbonate resource of the per have Chile, lithium global year XXXX. We and year increase from tons brownfield avenues as world-class capacity ramping production us a in just established we expect in brine of footprint. to lithium growth one XX,XXX an

maintain our quarter II. by market related completion with risk the also end only To difficult tight Kemerton Kemerton related the Kemerton progress months. the to in delay year. continue rates end It's to conversion about strategy we Australia. able COVID in mitigate track a but a labor delays labor and year, increased by labor Kemerton to Australia, the our have was on remains tight, market I execution we Western capital I next anticipate the also for These prioritize that We now to construction for first three completion for I over have travel cost. a II. facility We have Kemerton the situation a Western been restrictions three schedule of of of Kemerton delay II month and already modified and Kemerton been of higher

We and continue for to I both expect production II during commercial XXXX. Kemerton

shortages to supply under at to bromine Unfortunately, first and of well second negotiating are increasing that further investment and the ahead selection X the unable and Importantly, lithium chlorine demand. on additional we making to is budget. with we in Site underway, we Day due September. capacity the are schedule in investments in advantage agreements. chain. include are at meet and Investor of also Magnolia we the provide progress authorities details completed projects Wave We're take We our will expediting to of half

in phase. acid. clear that to projects These increase currently the overview capacity of hand A projects increase quarter. an the provide our stage. evaluate designed hydrobromic are the project retardants the in production call will who two results brominated our flame select Scott, to for have financial are to of also the third will I brine over is Arkansas in We and of fluids capacity now

Scott Tozier

good adjusted from is prior EPS, $XXX from which for million, gain and margins operating last the Bromine business a Thanks, generated Kent, of EBITDA Grace. year. of FCS stronger $XXX begin same million higher by million, of on an divestiture an of gain $XXX We X% increase includes FCS excludes period $XXX the on strong which net was GAAP sales, W.R. our the and up X% Slide the the of million income from to Higher Adjusted which was segment. quarter, after-tax $X.XX Lithium everyone. second year, related to as well year-over-year. sales in resulted as I'll our slight sales quarter, X. morning, net driven during the

turn adjusted Let's business. EBITDA for a Slide X to look at by

higher strong. market to second incentive foreign quarter last and under movements. the XX% year. increased to year, orders demand spodumene primarily Lithium's pull $XX shipped EBITDA related be FCS, continues compensation volumes, by or to very pricing. by to for lithium agreements due excluding higher exchange End adjusted million forward, million FX prior higher $XX $XX volumes bromine by increased was Excluding Talison Adjusted compared higher Higher and EBITDA million bromine costs by partially increased we to as offset adjusted adjusted continue customers and EBITDA EBITDA volumes corporate and long-term joint by our for driven compared to venture. from

X leverage from excellent demand. although, benefited to capacity proceeds taken times. from inventory or FCC the to in company's to volumes a shipment adjusted portfolio. the timing. strength. PCS winter storms to beginning to business significant X.X FCC just to year FCS demonstrates the we we experienced large additional EBITDA which excess our managing very further change ratio American to decision was our sheet. prudently $X our added by North due customer by highlights previous financial sheet The year. were asset have reduced drive by the continue limited ability of and mix. Since order divest the Catalysts' transaction our demand results, that a CFT QX, down steps strengthen value the patterns a customer, meet the That Following generally impacted our declined This strategic was from be to higher. in offset balance favorable balance the partially cash Slide have trend million

balance a the financial growth gives flexibility and sheet dividend. provide us investment-grade we accelerate to growing profitable continue rating to Our need strong credit and

Kent Slide XX, to Turning earlier, and from updates that are to mentioned walk there our several I'll key changes guidance our you through the guidance. previous

to the expected lithium foreign cash American improvement exchange an Adjusted lithium our our reduction previous higher EBITDA First, plant to corporate year to year, offset on forma the this expense. XX the expected column, the Lithium million interest mostly right changes In The higher higher the FCS improving mid-teens sales and year. of XX% the a and higher turning by of timing expenditures to outlook. percentage guidance be to reflects rest reflecting EPS as ranges in well June from high see diluted trends Slide pro we as due net for and far Adjusted benefit to And cash over labor guidance discussed. expected outlook. by of Guidance of EBITDA same, the catalyst FCS revised basis, as increase sales toward net Western North capital sales, removing from growth expected $XXX detail from volumes on guidance based from and is for year is lower Xst also more the the adjusted rate. the outlook. net finally, costs is volumes, improvements the operations operations. on sale the and higher tight guidance of a for I'm capital XX% improving an bromine previous on of our in our is on by net beginning working GBUs the last adjusted offset Kent volume markets $XXX in for Australia, is million business on trending productivity. end tax to in restart range at are plants tolling expense

unchanged. outlook pricing is Our

realized sequentially roughly pricing XXXX. continue but second to year of over flat to the compared the increase half We expect full to year, to remain average

commercial continue remain costs. also owing to margins costs incremental ramp tolling XX%, Margin up We related improve, below to start-ups volumes. sales to project and higher the as to plants should expect

since XX%. Catalysts changed report outlook first be XX% the to by lower anticipated to adjusted hasn't quarter EBITDA Our for with

markets the fuel Lower as ongoing more However, the are the first to Gulf Coast, optimistic, North to results change America. winter storm patterns continued quarter of order impact the we the U.S. improve related impact year-over-year customer from primarily are and in in globally. in

and Finally year-over-year the Like U.S. adjusted mid-single many declaration growth EBITDA, previous we is down from are force expect outlook supplier companies, a from industrial due price expected digit in in our by majeure and for for is disruptions chlorine to constrained now chlorine bromine, which materials, our in half, we lower production second shortage. increased experiencing be supply offset improvement. the costs Results as the but productivity are raw to it partially is due to

accelerating are plans bromine. expansion our in We

unable we disruption. to However, due take advantage been new of chlorine have the capacity this to yet

all expected short-term to supply ahead And to are chain I'll are plants levels EBITDA it transportation rebound results strongly Bromine Looking we businesses, demand. improve sales Kent. the continued global with up, from Catalysts volumes, and fuel on disruptions to expected and and assuming back results expected the as ramp rebound from XXXX impacts increases improvements in three winter to that, new hand XXXX, to results expect higher Lithium are for the storm

Kent Masters

objectives Slide for we execute our strategic Thanks, Scott. On Okay. continue XX, XXXX. to on

restructuring is Construction execution and XXXX in First, year. plan the are project at volumes this next profitably. to commissioning expected contribute we in Both volumes half are commercial La of trains well expected of are as first growing complete with we the our Negra, Kemerton. at despite Kemerton

on we previously As in lithium expediting our are and increasing making demand. to bromine meet X projects discussed, progress investments Wave

are we productivity. Second, increasing

in least track million our improvement year. this productivity are at We on achieve to $XX targeted

expect model these to build we continue our of a improvement. to culture as and We continuous operating build improvement, on implement

shareholder to Third, FCS of our by we actively divestiture. are completed maintaining portfolio the optimize managing and recently continue including assets, investments approach value to our disciplined

use. driven being we June, initial of our with report, to the Finally, greenhouse in beginning annual mind. and emissions all In published reduce gas at of targets, including sustainability are our water efforts sustainability fresh plans sustainability disclosed

also our these for and all speed are with closely rating appreciation companies investors full of to a to customers, they sure, up We ESG and are developments, efforts. in working have make

I'd So open questions. the for call to with like that,

Meredith Bandy

Operator, now. we're ready questions for

Operator

of line [Operator Instructions] Citi. First with question the from comes P.J. Juvekar

P.J. Juvekar

Negra Good morning, Scott. and La finishing Kent and IV. III Congrats on

in capacity conversion Now plant for hydroxide would done, you the that's or are a building elsewhere. China looking new you consider either conversion U.S.? And in

Kent Masters

that. So thanks and good PJ, morning, for

construction, as completed about plans we've - III Phase see so in the go we're the - still hydroxide we that is at are commissioning, Negra. you little then, We in a have the to bit near La so And capacity still term. mostly

coming the assets for next So just capacity, moment the a are our focused sale. on Kemerton want the do look year. a next on be find that for in it's are and we investments of bit And will China. of acquisition we we to that but the And at conversion of then are challenge wave -

have. So a to have we continue we minds do And the we we parallel, to well. we're if are progressing our of an as were of kind progress find to also there. able meeting greenfield a acquisition, in greenfield that plans But projects plans we

we not would do greenfield stop - they are they did doesn't parallel. in projects, would but we - acquisition, an we mean them and plans just our if So that

P.J. Juvekar

Okay.

Kent Masters

last last U.S. the then and part part, sorry about the And

the So next not or it's year look the but in I so, mean, we at right. U.S., will

mean, the at least most - there Asia. be China is for view is it's So the several capacity or time. being years and cathode going to our we producing in that's be built I next is of will

time have before or America see North to need if we we so Europe. have in capacity And we

P.J. Juvekar

to color Okay. some last long-term wondering, sort the I of will could I comments customers related on customers in was some who Kent, segmentation like next about of some of contract, and XXXX. maybe And on have contracts, this call down market want I you that sort Thank you market Eric will made, negotiated have more especially back add had customers? question segmentation market then, is, go to customers just of think that those, you. prices

Kent Masters

Sure.

much we've it not were learned previously, strategy formula that customers we long-term of want about that we use for So more kind our in to trying customers. yes, - add of I we are than is don't and we talked - that the a what know, but can buy if had we all was past to contract And way. all

actually So they good and we well. think on how we're to trying segment buy to it's us as want for

the but the where in standpoint - still And bit. dampened a portfolio but have it moves probably, So middle, some we move you'll slightly customers, more with contracts shakes want And the we more from how one-year that market market are contract. more look third, of until tell a may or that the it like looks then out more other that a the - just spot. fixed closely They contract. but market, it's not the have like on it's we else not with a be that, we longer-term long-term all the contracts lack a like but those extreme, that with third, price. now. we settle probably it our that with ideally see a - anything of I kind to a for can't you, probably that look than contracts And will it's a we are market, have probably - third, It's with

Operator

of the UBS. Your John with next Roberts line comes question from

John Roberts

at companies industry delays mean, you're got undershoot actually here? needs. delays, delay the as entire the their what here, industry demand we've I having having accelerating II, going the supply plans if the significant the car On to is Kemerton

Kent Masters

resources kind I if of the they we Australia, market other away. is is extreme. their availability of you're as Australia their If you're if and labor ore, large state Australia. all always Western the not all prices That's Well, - Western of biggest that resource in say gone let's but labor, famous are I forward, so the and the of draws drawing projects, an projects, prices example, industry And COVID, just significantly up gets go to the they But issue Western have Australia, can't building been resources. but by mean, probably today have the an for up is only iron difficult tightness the because speak in lockdown doing state.

we Thailand can only not the part even from - China get move resources from of we the can't resources get U.K., Australia. can't we So or not or East

So Australia. stuck what of with we're Western in kind

affect doing China, big project it that think So - anyone that a I Australia say not applies capital Australia. in Western and in sure I'm example. or will for

John Roberts

battery, pay announced something sodium ion to we its CATL the sodium lithium when to? then, Is ion that including stocks Albemarle. more all And need popped attention

Eric Norris

John, good It's Eric. morning.

as know energy you It material. Sodium innovation density, is that that chemistry. isn't may ion, a The new CATL's may more, a matrix make chemistry lower is heavier effective. is it and more

low, the EV of product a very grid applicable it's ranges low-end storage. and So for maybe

- think that I components is is of attractiveness sodium one it it's the right. abundant, - of

of and year given become it's - - end supplies or as in alleviate, been low lithium market that tight So so may they the it so. of have if the alternative - past

Operator

comes Sachs. of Your next Koort Goldman with from question the line Bob

Bob Koort

from morning. that It of I mentioned process inventory you you're just is Negra nice Good while and inventory the works there months Is a to wondering, six was of takes buffer be sure that complete. properly? the making La Kent, start or and as function of selling as commission. to complete have function a that, production, can it is process qualification the is soon then qualifying doing a

Kent Masters

It's both.

qualifying So are commissioning and parallel. we in

get - do been not get so that but of operating plant at rate. we us commissioning samples, the can rate, So it early takes it has operating qualification time to to at kind we

to that them that we the in same is So pole the process, during so parallel, kind and we're time to in speak, qualification we we're but long run save time. tent, - - of so commissioning a we

is I So answer both. the - think it's

Bob Koort

imagine you turn feed seen for $X,XXX. foreseeable will And prices spot you. feed plants or the that the Thank future? - north pretty and on of Wodgina, would ever do on there out you some you through Talison and spectacular that Kemerton Kemerton then When we've some

Kent Masters

Yes.

we'll see our So would And Wodgina I are that on how use feed for capacity bring do Kemerton acquisition, or an to from we strategy our about as Talison. yes, changed. spodumene either we mean, hasn't plans selling And then, goes. other that.

Operator

question Rodriguez line with next the Edlain of comes Jefferies. Your from

Edlain Rodriguez

on one Quick bromine.

in So you have you've but chlorine itself? the that issue do expect there, talked about correct when to you

Kent Masters

So a can start, little bit. Netha I'll add

So in some I to is suppliers mean, months, and space. mean, telling failures couple broader equipment expect that we right. the a think I last, a chlorine they're - issue had our I and of there us But

get a fix think higher got fix. we'll three to to told I of they've Yes. hope, So the kind two months. We going take - is to and short-term back permanent months then rates us they some think - up I us

Edlain Rodriguez

Okay.

Netha Johnson

I think mean, we're we Yes. look that it as back to broader that. look the the hopeful we there - opportunities at balanced at we will by be for market, chlorine QX as get and

Edlain Rodriguez

Quick you Makes be about in the seeing done portfolio that like, M&A, portfolio, rest else. you else the might like what the so another of the there? sense. there you in Can terms somebody - there one. below when in Okay. look that. - Like so deal, of the rest monetize of you But at you anything you've is you're think below talk - might FCS

Kent Masters

Yes.

we get pricing I and PCS ran we mean we were the didn't we we wanted So and process looking for. business, at our - a

is pulled and catalysts business. running performing well. it's as longer So that running for of portfolio, as And that, of we're our we're part sale, the part we no

those of broader primary PCS businesses fundamental bromine, that. three to the kind and of now we catalysts, the part on our the as catalysts. hold And then and we've part is businesses portfolio. core see that's for of So And portfolio, lithium

Operator

Capital Jackson from of question the Markets. next comes Joel Your BMO with line

Joel Jackson

there and pretty we've My everyone. surges prices we morning, spodumene. is lag, first contracts last, the in in But I shouldn't why stuff. on follow-up Yes, spodumene Good say question, seen also if it - will we are conversion extremely as the proxy what margin be prices conversion margin, been like think seems interesting really strong, have hydroxide those strong. - so I - carbon

they're price deal can up another often lagging in think spodumene the run sparked of to be setting a or you see we do spot prices. you do up, So with indicator prices that more the increases

Kent Masters

the detail. see hydroxide. for a make market little prices you to let visibility up. of I'll comment, hard prices and carbonate bit going. about prices the place of hydroxide try broad being carbonate we spodumene can for really a It's and And is China have a us in Look, The spot is and project, Eric only where

a down fully do you that, that so numbers And prices I And years. little I headed you contract see spodumene, last but it we're that super do in, the - call has same mean, the we But would will bit. be the don't prices we into contract translated have think it a gone higher moving I back or see been Those toward they cycle you of know do. than prices, see up, not up. think have that. what come I couple in

Eric Norris

- - this is is I growth China Hi, its imported reflects Joel. on phenomenon. question very The is What I spodumene. This China this. dependent and think would market market a your for

So in - to growth China. particularly supply and there pandemic is meet a shortfall post rapid of the given carbonate demand available in

us it's to the So It's regard, more with is lead world. of spodumene hard stay happen We prices into sell in From tolling. We other Albemarle sell up from spodumene bit chemical to is sell going the a and say. maybe But think expect take I we spodumene it's prices. spodumene the but what of come or seen for go parts because as market, right. supply. you demand. grade that We've of say happen advantage we to perspective, up short glass China yes, we a especially way supply that spodumene, a the it's to with don't what's is don't for

which price as So tolling favorable. market, that's of for to that very looking our opportunities you've able And we're about, said part earlier, participate I've at talk and is that spot improved in guidance. heard us

Joel Jackson

that. Thank you for

So out LCE volume just would for be increases. looking up at my XXXX follow to

year. number months, the XX,XXX ramping tons year? maybe talked you next to the more different pushing for about maybe delayed about volume still a Kemerton II year now little a next ton, Is for this it with right think think about few expansions out gaining you've XX,XXX LCE about tolling I on, is been

Kent Masters

think mean, I Joel, So you have down. to I break it's, it

we've First of talked said all, tons. don't on about We've XX,XXX plants. I think ramp rates

to versus ramping guidance. but versus our fixed different is see start-up in the talked getting the bit early second was The change facility. second full year by about it's be rate should that you'd Kemerton that available carbonate, in the we that calculate a a a to the Similarly in little slight between roughly the - year, in of basis the part the and those the rate say input, now going brine there plant for of phenomenon I can probably function like a because for at to with end the rate a XX,XXX should we somewhat three month the to growth that. able delay us is unit. brine capacity by Kemerton would next be run of in predict spodumene the what's - of but It's to that end of sort We've would at of carbonate material, a because year-on-year harder So for two, 'XX, it's run delay obviously achieve at will run that. in us we tolling year, toll that's harvested be to end our as a that and - a market ramps.

Eric Norris

over to commission, you'll up we lower curve that ramp a and ramp also on of then you'll make but will commissioning be how fast it's speculate we at how up able like time. rates to And in there well we that. It's products and hard so do ramp that - goes Yes. it's well how function is and

Operator

next Arun Your RBC of question Markets. Viswanathan Capital from comes the with line

Arun Viswanathan

had in slowly years Thanks wanted I there demand I Maybe seems were just get carbonate some and I of spodumene, my Thanks like your you to on your just most guess, maybe for some out. guess, provide views, it is but color taking each thoughts. of that just obviously different could working areas? characterize Spodumene itself oversupply We've those question. past, hydroxide. in supply

Kent Masters

can things. fill start, in growing, I'll Eric the miss I in, think the again I industry right. And Okay. where is past, But

you at a of grows, industry the percentage the as capacity So on bring industry. smaller

think they I those under past up showing extremes were as in periods we're to oversupply, have of in the as don't So tight, going with supply pricing. the

So hard kind think - as that for salt. the rock well I applies capacity across salt as for of - that conversion

industry impact. mean I seen So addition the an we the of as smaller conversion indicator. growth it That a has think total as see, of is rates we the I bigger, and spodumene each said, I you've tight. as which - kind is where of pretty that that think the is And less an percentage are. industry capacity, gets spodumene

that, and is think we're process but is sales those to curve EV be it. fact up and the at projects In which we're growth to investments you've and got we forward then, tight. good of executing at And in make those looking you've capacity, for proving lithium, are commissioning good them pretty got them ramping full to

Eric Norris

sell Arun and we don't the extremely add, we produce We all we disadvantage. could with as tight. could just If sell, more had would same today, hydroxide. that sit have carbonate it readily, I today are here And that three we

ability. the have We

spodumene the on capacity side. idle have We

So ground what we have is our we a That's strength going ability to are get we are quickly. feedstock capacity conversion forward. But limited. on not in limited the

So - year. our and for that's part of plan next

trend probably the forward key the and upon off potentially will But done is should LFP in high end density energy would guess hydroxide the lower based near in particularly As in to would China, chemistries. EV their term, going a some well take growth key well our I term starting see rate base. the say higher penetration solid and vehicles, low root the that to we end. other be has for to ultimately higher that that Carbonate the that to be, is regions hydroxide view state and smaller for as see of long my

a the require from on heavier burden that forward. tighter a being to going going hydroxide. that's basis We see So market long-term

Arun Viswanathan

concerns wondering on maybe elevated next cost logistics can any Thanks. concern just if for shortage you little while. the is issue? just the is there address, any And if Also from there container

Kent Masters

our challenge I and Well, supply a concern. businesses, across all the is a think, chain of

and lot us that that spend but probably a well, U.S. freight try the have and tight of to biggest, manage. working chain for and ocean-going it's chemicals on us freight chlorine and better pretty of in We are we streamline something but So supply a chain a digitizes, concern the visibility particularly moment, time at hitting number supply much trying to the is we hard it. big But so ocean-going is chemicals. to

we're making concern. that, So progress on still but a it's

Operator

from Vincent comes of with Morgan Stanley. Your Andrews next line the question

Vincent Andrews

doesn't If in seeing any, of from microchip. auto that the like of bromine, your sales you're issues volume or it I sales any real sound your shortage sort just ask electronics either

- parts So is other the the either year? either into that's issue year-to-date being the by of that it's business not half an back or offset or of it's that just just something

Kent Masters

where that from Vincent not we're chain, seeing in Yes. all - at we sit demand side. in from supply a the

been areas those demand Our steady. in have

Vincent Andrews

Great. ask. just And Okay. if I could

events You have material working forward I to or the should projects the on those and Wave two a Analyst on the Day move Analyst also you're Day X update be mean and those. are unique? we those looking coming concurrently up, expecting at

Kent Masters

depends So the material on say update, I'd definition. it

in we're you But not, the progress - dirt the are. moving We're phase. of yet. give on So mean on projects, - we'll still are and but we we I any planning where not

Vincent Andrews

Okay.

expecting any then? no FID - FID decisions we So shouldn't be

Kent Masters

that plans month. decision not final we'll - investment you we're No. go, I a have a we we the tell we'll not by have. we're But it's a - as at progressing in mean and

Operator

comes Your Bank. next the of question from David with Deutsche Begleiter line

David Begleiter

guidance pricing be year-over-year Eric, questions that couple your just to for lithium of in in Is QX? pricing on for you, up QX.

Eric Norris

Yes.

down down mean, I board the XX%, second quarter, first to so a history staying We're little in in we're the perspective. put flat were in - XX% here X% half second year. across quarter, to The the the we and for recount

be So will up year-over-year. we

over past to are including the way lowest of our price about year. months Another think XX is point rest this the

the exposed small our of China of seeing year. such we're we expect be amount to and to that as since we expect bottom contracts the as - sort or next the we given during market, of second for grade of in to of the So is in And year well. those in year. half that And there, spot this off, XXXX, see we for And then, into tech better given XXXX the as as roll rising move the prices rate. quarter into tightness fourth the prices last business height pandemic up concessions back ever

David Begleiter

some good. a you been Southern operations for of project going DLE like progress Arkansas viability your in DLE Very in also, Southern discuss you project Can there And Arkansas. the forward? guys has near

Eric Norris

higher look where we brines, to true to have say us, or process for meaning with Well, yes, being is apply, quality lower it, our operate spot, oilfield - is of Magnolia are we at and geothermal bromine evaporation have continue Magnolia where our we we both we brines, so or Chile. I'll that DLEs mechanical could operation brines, that resources impurities for operation lithium you only potential in to opposed and in apply have generally for is resins, U.S., mechanical a it's which term absorption, about DLE here as so is what made such who - talking operation the just extracting in a most you it often you effort technology an the bandied it's what about do brines. as that. present, to That would which a projects, it's apply they're

also energy given and but So consumes it's water price. more lot actually it a the more capital intensive,

of sustainability. drawbacks factors some cost like that and from include absorption, We're studying has it a that, to could what alternatives we that those resource So it. could deploy optimize

are challenge with decade consider the next that our the given for what cost we put in resource would and five that in later high technical a in years, to then resources, we term can - given our growth its that those as Given its and we drive we near where profile. quality do given

Kent Masters

And Yes. just would I add.

we've but Phase we So something and that our in we - - look it it's wasn't included didn't X at.

at looking technology. We are the

have We're we around. kind access to brines the and We the brines, pumping operation. the already have of

it's that if it we think get and Phase if right. we comes believe be to right, a we'd the right. So probably X, if we in in cost something that the leverage position is position technology good get that But we technology

Operator

JPMorgan. of Your Zekauskas from line Jeff comes question the next with

Jeff Zekauskas

XX equity and or some when in XX operation Thanks million income you in your XXs million. are had and in sometimes In very any XX what's the you much. the million come? XXs, lithium, sometimes are are the service and we've between two, Talison there to And difference

Scott Tozier

Scott. is this Jeff,

income over that by equity spodumene through that seeing impact by affected our the the is course So of bigger is transfer partner. from market Tianqi, the is time. equity income price, has to both by is ourselves that's you're things, price affected one - rising Talison being there. that out coming the shipped two in either volume the The that's which And to well as or flat been as

lower when month are higher it's income. price track going is will So indicators going generally see high, the to out a that equity about market on see lag there. when lower, that equity six that's income, And a you to a to you're

higher, equity half higher about the the in of questions that right So that, as spodumene some because we should would - going expect the are that. income prior prices second talked in to also the you track now,

Kent Masters

just in for that mind conversion been cost should that it's up, You price when input our though goes up. goes keep

in we the between really all to don't it But - because shows matter difference what so income it's through. doesn't - lithium it and it's washes equity up the much P&L. So us

Jeff Zekauskas

up. my follow for Then

were that of I contracts, think they if you several you said market. would to lithium had over think, the the have past long-term your contractual years, describe I terms above

that toughness, contracts the case Given and some long-term your are lithium current its in more tightness prices? it comparable market now or is the to changes

Kent Masters

current. what depends on It call you

Jeff Zekauskas

Yes.

Kent Masters

Yes.

current calling depends it on what prices. think I you're

prices suppliers were I is about that's over above correct. different have, everyone those. prices you outside would if in can that which China you're think about what to But or say So probably probably think probably those. if still talking time, of China, line I contract prices contract spot in see it's above

Operator

Ben question comes Baird. of next from the Kallo Your with line

Ben Kallo

guys. morning, question. Thanks Good my taking for

on your get talking you you bromine. the a know, I Tesla is call, money. know on how about you work you lithium, we and just lithium Just raise On front on and one sum see saw then materials understand, redwood the want maybe recycling of two I but to this question large players the lot, you on as - two, and before the number - they one. with competitors increase the the think there. then - in recycling that was and Mark LFP a Number

talked LFP. background I you in large a like comfortable around comfortable bit the then there demand want Just that of how expansion. you with and are to you but increase this, understand bromine, - just a hydroxide investments on into is think make And timing for looking carbonate versus little about how the

think earlier. I it's already really chemical expanded

you you much, see So just bringing know, guys. how you strong want on new that very market think to Thank capacity? for

Eric Norris

world There recycling of is are Ben, the regional It's around this set referring of and is nature collection world. the because similarly is companies largely regulations to the Eric. model around in recycling, the here a companies happening you're a On of and Europe. so in business the U.S. different

and case technology we not competitor As we a that's We lithium companies. with which is every of rich. that player, partnership a what almost deploy virgin bring helping remove view approach lithium operations, a a all a and we're to the engaged partner, not comes existing byproduct our these brine the in in process, be knowhow to out as of global some take could operations, their and/or of them it

that's so way the And them. we work with

and and these on remember set this lithium. ahead byproduct the after and is bit - cobalt, the the Lithium nickel the recycling fit largely we this got operation. of companies Europe where to usually That's have - then, in. of is up a a go is You not lot is

trying part lithium our and them value customers mix recycle the as bring their we and continued recycle helping we to this look with at from it to view important sustainability standpoint, so to growth. of on for And we drive their them partner success is a back as an

larger On hour what some market Tesla by to here U.S. around intentions but those There's be that very some very I XXXX, It's need level, lower at we our energy outlook. going side, to a per higher for you range. good kilowatt end, XXXX meaning good going I Tesla's get the size though for think described that you unit I which is the the in it lower the EV can a get to of shift - generally one have the expand and the applicable technology need We continue - still vehicles, down, market, to the electrified. believe think can mid and vehicles and might cost in proportion cost kilowatt to range. news with of And view going LFP up you you're a as range - get mean, you density gives weight. consistent the then, per - the hours if you're about that technology. by lot today. are get higher And the order get, drive cost, to

approaching way very market as it So to that's Turn And well. the it's we Netha the over I - bromine. mix Tesla consistent for see. is

Netha Johnson

Hello Ben.

think projections And growth. company's Magnolia return years. I over product about next that do really is timing for accelerate capital over of us you great we in lower to the years. participate and higher bromine facility. produce the we're talk that's really And great us have executing few the We because to our we the what place of make we it building If their strategy expansions, out markets the we and XX know the every it feel we well, We've that intensity, we're about just doing jurisdiction. good asset been could for for at a of there that and capabilities

ability those about really there want leads in of us the feel expansion timing projects. the projects deliver to have plan we and And and those confidence good that their execution. of out high what to So we

Operator

next with comes Your Bank of of America. question from line Matthew the DeYoe

Matthew DeYoe

to I you have XX,XXX demand, meet do. ramp own need, pushed tons, been if you're increase that, Kemerton you'll playing have hydroxide by you plans, closer know desires, fast as timeline do going to kind their or It's what metric partner to those they And singular Talison as your Talison move expect need that expect think as to So joint you how the a Do bit. just tons. guess. output metric you a your see discussion to out do XXX,XXX you can versus be will I that of you

Kent Masters

optimize supply. think we'll And joint Yes. a It's Well, discussion. it's the a definitely JV. I

our at JV or parts we But have with - that's product to the own They their product that optimize will So have Tianqi product other kind product portion Wodgina. we economics. And Talison of in swap half of Australia. ours. that that of

it product about feed think is Talison would some their then you goes feeds other way and and portion think to portion - Kemerton. I our at

However, physically, it it that way. probably work won't

product the swap will economics. to We optimize

Matthew DeYoe

do about All this? what guessing expect portion to [indiscernible] versus more, right. it I Tianqi you

Eric Norris

in. they can't is to least jumping terms of Kemerton. there in around at in going what predict This is our statements is which their similar is do. have first mean, some owned JV two the its over by potential And public - least I our size out investment Kemerton very time facility, to Eric Tianqi We the of in really us. Kwinana at

to budget a need. what So it produces we

what at And what's if the take we ramped, to We needs the they really meet need in, share talk ramp they is will don't how comes won't and to the on their on allow it you fully and right, being their there, need ground II. have to II invested down CGP side, Kemerton. CGP have So it. we about feel with I CGP of

So XX%. if other take available. It be that's to least versa they don't it could more on of It We're more what's works. be vice at side. to the entitled need always how could and

Matthew DeYoe

Okay. If follow up. just I could

talked were in So would like provide the some price much I how the and sense peaks you been kind you loser XXXX works, was some higher chosen winner done context guess a in much the you as maybe realized had you much cycle how this have how to troughs net or you path in pricing how if last over peaks XXXX, like if in this much I with it's XXXX. of still approach, Can get been the with look your trough new a and of and I in have understand but higher about, the imagine versus sort lower lower, time. has more to would to theoretically, been for, analysis would XXXX over

Kent Masters

Yes.

really So the can towards analysis lower done we've been how long-term share we're you're much long-term what peak it contract right, during trough, all much end so higher pretty with don't have type new that under bottom you which share during with - look we've contracts. the would we exactly But the what commodity pricing, numbers it what we're model. the which of little our have we to point. pricing and bit on is that But not the the that up the about price know higher, would where does We're the of price. question, have is that trying but a not we that expose be. the market, last don't portfolio, I part with been answer the it and more spot versus because part - fully And other to other the the like, move to is ourselves to the how peak would

Eric Norris

before cycle. and supply and EV, have were such through a the bottom, peak is different it gone earlier reference - and going I'll in in now. than at more same since think really now, I the with last it's important of such it's won't And I don't of to automotive there's - is also know. cycle that probably Kent remark size size now change all the that we're and are volatility look time. given the the of the and There cycle. maturity demand that a the moving growth the that of going dawn additions think It's before. and next We through But part of to only involved the producers lot made there a one Kent no we've -

the pricing going to in continue So structure to place evolve. is we're putting

structure. have We the contracts fit to

works. it know we So

prices. have We fixed paying customers

they is will wave give We - and take, ride and going going who will that point they at we're to the commitment, only year have are that they - want to a them wave to only customers, going up.

out we're at continue it we'll how for to stages. early - over but time, you, to it's settles have So dimension the

Operator

comes Wells Mike with the question next of line Your Fargo. Sison from

Mike Sison

quarter. Nice

percent Just be your the lithium the is 'XX tons for demand, what or whether to expected curious in thoughts on industry?

Kent Masters

demand Yes. put with plus. go The much We're a We have today. I our earlier ago, it's think I growth do - it's the look bigger And here - we and and consistent recovery. model market year, some did and 'XX Mike, last, back to seeing that was we what because overall model. have that. a this in still we question, out post-pandemic XX% year overall demand - of may it's at we this is than it months a

least So magnitude I'd say we're year-on-year going 'XX to a basis. order be that at on for in

Mike Sison

volume on sell. I then, just you X, curious timing roughly, have the for available to is when you'll And on 'XX, be of sell in Wave know, do Is but all? the it all - there some able the it 'XX, getting you'll think capacity terms 'XX, when to

Kent Masters

When you La Negra you and mean, the say capacity, Kemerton?

Mike Sison

Yes.

Kent Masters

over year. Negra Kemerton Because we're time. is, rates over and ramping building time. to plants full I Okay. - selling everything plan going - the between full up for 'XX up at ramped be we're It's La mean, to But Negra be La our going

Mike Sison

Great. Thank year. full the For you.

Operator

next of Your comes Kapsch with from Loop the question line Chris Capital Markets.

Chris Kapsch

more implied that discussion volumes being from from is around nice so and increased nuance tollers. guidance your of to follow-up most via more in and coming Greenbushes slightly converted this that spodumene downstream on the Just volumes it's via

And only mind, toll then grade feeding that market. are I that on stated First, rely with for the lithium this volumes you extra you've for battery seems past an the is in in Eric, appreciate it carbonate grade like in conversion the products. technical don't case, into chemicals, cathode characterization. that accurate but LFP But

current the technical wondering And the is thinking being should be market. if accurate, if LFP more of seems you're then address you leaning of volumes? to grade that into then these Negra just also say part just, ramped market like next currently just opportunistically and this it just the toll case, we you maybe that will is address will or will market, relationships I as that of these tollers is carbonates La - - guess that's via So then year. the grades But a once finally

Kent Masters

bunch Chris. a of questions Well, there,

LFP, one, was go Chris? you what to had the but do I was had your help on something just to first the here. before with, that, me Let first that? What stuck question, me which

Chris Kapsch

Yes.

-- the So

Kent Masters

Ramp.

Chris Kapsch

The volumes… tolling

Kent Masters

real volume growth is had tooling on better first first plants, tolling. is in efficiencies second our come the differences online didn't What's well Year-over-year year, increased in we year-over-year. our half, operation half, Our the - maybe and in because half the tolling, year-over-year as volumes, volume, second plants last - look you as if the guess. and seasonally Chile, plants tad. I volume and is second by we're to yes, yes, flat, the quarter, sorry. in half our the a the have better there, fairly in going moment half, slightly be in fourth better The Senior first better we to half production at have - some production produced just we second - little because back

bit On half we there's carbonate So it's a China, and using there. market. toll we're what year-over-year that in going second difference of first between when LFP the for it into half,

market carbonate what the said that quality said produce is I we ago, in - for don't sufficient grade we what what think years I recently LFP tolling able China. we to batteries a the better know more supply but to the is network market,

that again. So that's now, The was are going we you help question last material then, selling I'm ask currently. where And -- to

Chris Kapsch

ramp the addressing via relationships and feedstock do those to year, currently, has or need intend will Negra obviously that make via next the La relationships margin. you're mixed costs this participate you tollers still tolling since tolling, So a - the that you when higher given fact you implications stayed to

those that be you've with? done tolling maybe partners comfortable bare there or the So stayed past if curious - relationships a would you've with like in hub tolling you're

Kent Masters

a year be Negra I performance might for a our strategy out of of only of we IV be might that's of and strategy but what price a volume. couple lot that is a for and form. buyer years, La for put a for contract La under be in buyer That to III will Negra's some it bit commitment our mean produce It growth, both.

the use Our strategy bridge a III IV. build the is La to we for total have customer it Negra relationships when to and either as volume

in opportunistic and it take will So selling a we're which where those in some is is market of today's - La we - really market, a is of volumes, pretty IV III also basis. Negra toll to well. customers currently on on and as But to selling playing tight they tight, play advantage a and were particularly what spot

cost to higher of currently whole have we advantage contract. while produce taking volume, this higher we're than spot So prices

Operator

final our And comes question with from Research. of Vertical Kevin McCarthy line the

Kevin McCarthy

for year business. historical squeezing your are look strokes, the prepared me maybe the If in yet. rebound to Catalysts about I Want half in broad margins levels, you remarks, running Thank we you first in anticipate indicated you in. at think the ask half of strong the business. of In they

later? likely So or back books. get I 'XX order you're soon refinery might those seeing terms when might if to of catalyst or more out be expect And was we what flesh to wondering as you in margins that levels as 'XX historical your could in that

Raphael Crawford

This Raphael. morning, Kevin. Good is

we of respond, to half has the one, first from been an the Just a winter in series the there certainly mean effects. storm. had year, of impact I

from effect more of mix. to that lot as has catalyst well of our trade margins as a was pandemic, a residual high-performance maybe We have that a on impact impact workhorse catalysts pandemic on the and down

I I for example hydroprocessing recovery. would think best products is high forward, see performance our what of mean, catalysts. we're Looking some we known, our

change as it's improve already going higher XXXX, we partnerships to XXXX start catalyst, today, great And improvement Again, that in that great clip markets the back. performance we're occur are that have margins. mix start think recovering, out to impact faster it in the will into you'll see to see see come start our As to at our those a for mix. that Kevin. I going We margin that

pressure. us they're under they needing customers We We were when more had traded higher those under this lower telling for higher at command catalysts, to who performance a to that North down margin with operate have performance is us. just to rates, run that they severe they're refiner, large higher conditions, need are, week because meeting catalysts, they customer starting margins a American

materialize think probably will you we where It to it's see them. to So start trend. start in a favorable will XXXX,

Kevin McCarthy

Thank that targeting of new although be XX% U.S. now you Eric. for that. out think might today And alluded XX% the prior a non-mandatory. is then XXXX, the sales, I secondly, I that you answer, to auto - it I news if as thought for EVs may to I In read by

way already your market So similar on impact announcement? of just potential view demand about to are in levels any U.S. to accretive that. incrementally or the curious tracking do it outlook about you that Is the automakers think or what your

Kent Masters

Yes.

It's ballpark just lead I'd so It's maybe it's I'm today. our - shift - perspective, probably model to is already it companies like But early this to mandatory. I Kent. more don't So it's don't aggressive. it That it's got it's - think. understanding And something legislation And that. out in - of was I It's from early maybe a news. not not are - the the my something trying say car - from and then, the days. it thinking, it's doesn't little that what

our view would neutral. think I be that's

Operator

would And turn to the like closing for I remarks. now we to - will Masters over call Kent

Kent Masters

today. participation thank again, Carol, all, your on for and you, our call Thank you

Albemarle, can a to excited extraordinary lot see, you about and we be opportunities see for As we have at growth.

will and effectively all today. comprehensive enable to our Thank you that We then. call our detail hope Investor efficiently. on and this discussing a XX, objectives and We Day greater during operating able you, on will to concludes in implementing we that join are us September our us to look forward be model execute

Operator

this gentlemen, today's your Thank for conference. you day. and and Ladies participation, a wonderful concludes have

You may now disconnect.

Albemarle (ALB) 5 Aug 212021 Q2 Earnings call transcript