ALB - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2021 Albemarle Corporation earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, David Burke, Director of Investor Relations. Thank you. ahead. go Please

David Burke

welcome Call. and Third XXXX Quarter Thank to Conference Earnings you, Albemarle's

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

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

our As a earnings presentation. statements the financial law. projects securities the to website. of applies in of contained timing Company reconciliation comments some call, of within today including statements note release federal forward-looking expansion call. this measures, earnings on reminder, presentation, performance, Please can to also our measures which press made note to appendix our be release may of our both expected are our statements of Please A Same language posted during constitute the forward-looking financial in and outlet non-GAAP and cautionary the guidance, earnings meaning refer about and of GAAP our that some this found language

turn over will the Now, I to Kent. call

Kent Masters

plans. XXXX you for by a Thanks basis, will and our reported compared was last EBITDA call, provide I $XXX discuss sales quarterly $XXX us progress to EBITDA year. adjusted of David, third will Scott and and all goals on our relatively today. of the guidance. thank net our highlight year-over-year quarter on more We update improved results, Sales joining the million for results, solid another adjusted flat with quarter On expansion outlook, ongoing while million. and our today's XX% detail provide on of an

few EBITDA minutes, our higher, get SCS results a our net to revisions our financials detail into including more on from XX%. and sales were quarter will third up in guidance. was our Excluding XX% XXXX favorable Scott

based As third this results. in release guidance the on our our increased we quarter stated earnings morning, we

day, September, New pleased signing into business, our about have disciplined plant on on near dive deep Energy which well investor expansion early are our Since investment Lithium how as in accelerated Guangxi to recent includes strategy acquire several built During recently those Tianyuan owns Tian updates provided approach. we or event agreement our growth we a announced Materials color we of think This to as an a the and did near-term efforts. Yon, our that Qinzhou. conversion

expect on the in sales operates to are the plant for in year. This next first to next totaling of half We advertised track transaction puts as year. the from this ensure first us quarter and close first this of plant

growing for support on recent demands. customer's signed year. projects addition agreements meet tons we this two an X In XX,XXX up plant, position have projects. in initial to our to of for to Each conversion XXX,XXX metric of basis Greenfield to capacity, tons initially These added us up per targeting lithium annual China hydroxide investments metric

achievable. plans so in our When XXXX. announced set On set venture aggressive, lithium Wodgina addition, with X, goals, In we Slide ourselves restart were Marble these will that we for the mine of Western joint we the objectives of the see the you did intent challenging but Australia. with

by year, significant the the As of and approach into goals. achieving the proud has our team end I'm of these excited progress we the effort put

the of accomplished on slide, we As majority do. we out the vast set what you to have see

efficiencies capacity projects of significant our projects. growth improve For example, also progress the successfully high-return, will We've Magnolia and we operations. and on increase projects These are our our roaming made lithium both progressing at fast-payback JBC.

X. Now let's slide to turn

to I'm excited managed carbonate Despite that with production all Initial first plan. In X X, and and execute ongoing major we by plant be X next in material completion that is of to first Kemerton production these completed Negra now in half with our year-end requirements. continued year. of to the first XXXX. the significantly a recently shortages qualify construction La our proceeding Western with the near-term. their hold used and the October. X qualification impact region related at to and have and on of volumes team efforts, to sales we herculean late milestone lithium First signs customers easing the second XXXX. track travel This expected Kemerton process announce will expect no are construction the in to the has showed half to meeting Australia, our achieving pandemic labor continues restrictions, efforts in virtually companies team We in completion ensure

the While to program Tianyuan progress X Wave the the we Qinzhou, including to produce up tons prioritize per last to to we've lithium train spoke our additional an port and are metric on for September, designed these year, acquire to announced XX,XXX a year. end near recently At metric our our to tons of projects, million, highlight first we I'll of the made built $XXX facing Investor per with since the agreement expand of conversion risks. X, to plant you potential to challenges strategy resources consolidate On Slide at at we continues mitigate Day. XX,XXX

We back as expect follow this acquisition Xinyu our a acquisitions in and XXXX. facilities to Chengdu path of similar

as in Mine with critical to conversion we capacity of of and of which This we expected us to of be Wodgina tons. X world-class spodumene XXX,XXX resource initial the our Kemerton conversion Australia we resource Albemarle accelerate lithium partner, restart growth acquisition up make close agreed operations can Qinzhou the produce our X transaction, our investments metric Initially, with sites. to year, Australia. of ramp next is to capacity metric Together Wodgina lines, space. tons enables Lithium This plan to at will Following quarter first begin processing in additional each XX,XXX our in and which leverage concentrate. of standards will bring the production Western to to the ramp Western plant

in investments X We each agreements initial at Greenfield battery-grade Meishan. build and hydroxide proximity offer We with production tons plants many signed spodumene additional at major efficient, and and optionality to cost have These plan capital Australian China for and also our lithium in potential. to of sites Investing of Zhangjiagang customers. future in with China target growth XX,XXX low our identical conversion conversion resources return of site. cathode invest battery offers metric growth expansion high to

shifts explore expansion capacity to conversion continue supply as our global of We chain the battery west.

project for X review our global pipeline. Slide of a to Turning

see, robust around of a As executing is projects can you Albemarle all pipeline the world.

Project increasing sustainability. allows designs. repeatable production to continue projects Yield our in and Australia, lithium incremental Kemerton technical leverage to support us Salar progress technology study to For is leverage Bromine we electronics, additional Chile, These with business customers In our growing our and increase improve and on rates, expansions efficiency U.S.. work pumping brine low-cost and telecom, automotive. know-how the and and scale the without proprietary diverse utilizing efficiency and like resources example, Improvement In to to high a greater expansions pursuing markets, return Jordan

we U.S. U.S., to North in that the I'll restarting the Lithium sense the extract gives of in the we're Arkansas, process financials. I the several In continue pipeline. to leverage call we Albemarle you the as This for Carolina, periodically this a the double look to to update turn technologies is [Indiscernible] now And production. you our continue to in producer. carbonate our expand production. evaluating are Nevada over has of a optionality diversity Kings Scott a our Magnolia, options lithium hope Finally, We'll mine. Peak to Mountain, Bromine our lithium. Silver our global evaluate local at first expanding facility to on facility and

Scott Tozier

good and everyone. Kent, Thanks, morning,

on Slide begin X. Let's

basis, an $XXX we year. was resulting a million period of During flat sales generated related after-tax costs. This the driven sales net recently on from for EBITDA million FCS and includes material GAAP freight improvement the Adjusted $XXX lithium million, increased to sale third loss decision. a arbitration increase bromine the Huntsman XX% net of segments. The same strong of and year-over-year essentially announced quarter, raw the and charge last by from was our $XXX

While our assess to continue legal options. we

initiated regarding a Huntsman resolution. with have discussions potential We also

EPS Excluding was the for adjusted a $X.XX down this charge, prior year. quarter, X% the from

a XX turn at EBITDA business. for to look Slide let's adjusted Now, by

and in cost in quarter for Company's valuation in million international SCS. Bromine increased and strength. by the by year Third year. sale Lithium and $XXX to lower In partially venture in the was increased increased our the adjusted a plans regarding is constraints ability Chile, locations from material were limited raw costs. the was included $X million out-of-period million and the increased all our favorable Lithium's excluding to EBITDA Slide higher X-month adjusted given of partially the Talison compared settlement a higher coming $XX partially by impacting in income, execute the growth the our higher-than-expected to to XX which joint or due strike shipments EBITDA adjustment compared were million offset financial the to three the Salar to adjusted This to pressures, venture. due million from Volumes years. XX% inventory $XX.X freight year-over-year, highlights by offset prior over for That The EBITDA $X tolling sales bromine EBITDA key Catalysts, higher joint chlorine million Brazil. excluding $XX of year, previous able to higher prior dollars our offset GBUs. tax of Adjusted declined spodumene by impact offset pricing, quarter. adjusted volumes foreign flat, thanks EBITDA exchange. We by

advantage We arbitration don't X.X modest provides recent of fund growth X our Our times. the our flexibility growth expect to with below to of the could reduce X.X increases. range at us of to it temporarily times supporting current plans. net EBITDA quarter the This take while was end opportunities. growth as dividend our to targeted But capacity impact upside long-term debt decision to

related and that markets restrictions inventory adjusted Australia, and as I'll to earlier. third XX, of due guidance Capital EBITDA materials investments COVID Higher performance. raw Western through cash to reflects quarter sales as travel our updates tight Kent in shipments higher, full-year in Turning our continuing Net is to growth. to related you Slide mentioned and the labor were and operations walk unchanged net to timing customers revised strong well guidance increased XXXX costs. the from guidance accelerated the expenditures

from to EBITDA Turning compared to for expected outlook to average adjusted expected And higher the teens of lithium's to tolling. GBUs, more XXXX is year-over-year. to previous higher now by the up and XXXX. That's full-year driven is grow primarily flat full-year mid-to-high due in is detailed volume our slide XX now each our growth pricing volumes to guidance be pricing. The realized slightly on

As our are reminder, a mechanisms on of long-term partially structured to most sales market. are exposed that contracts Battery-grade the pricing with lithium

by on due is Bromine also to tolling cost shorter-term now margins productivity on and double-digits. project from for tolling battery-grade from be stronger expected XXXX sales to due partially guidance grade to We below are That's technical growth remain expected XX% improvements. sales market EBITDA spot full-year lithium. pricing to benefit adjusted retardants. the in and low pricing Full-year demand average the startups XXXX of previous higher offset related continued and 's strength and also the to up flame in

our U.S. owing freight in pricing a SCS -- has That's is demand adjusted expected expected freight venture EBITDA the full-year improvement while bromine higher costs to with mix last mostly customer's to the in higher-than-expected changes continues market year-over-year in mix, EBITDA chlorine EBITDA to from to costs. tight. bromine across to to of and XXXX but availability pricing felt lack and expected storm for continue Overall, due the and including due energy, due winter to constrained disclosed -pandemic to now the XXXX. late margin an orders. delayed. chlorine to levels of raw but decline XX% our margins conditions sold-out lower a also than guidance, patterns. are the Catalysts and more higher change quarter, and also and joint the fourth Our in impacted conditions businesses. improve Year-to-date, previously market due of to product FCC improving, material pre of to since margins is remains materials, primarily impact And income. outlook be in Catalyst The between raw higher are be will timing or CFT not impact volumes is XXXX the our remain shipments. inventory higher the Coast be fuel XXXX in total, orders inventory. offset XXXX until to Catalysts of all decline lower XX%. has previous of improved by volumes [Indiscernible] HPC order The quarter we In fourth-quarter expect be earlier proportion return demand increasing global greater three Gulf year, and in in the product

We global shortages. in energy impacts Supply rationing supply factors, logistics are including and closely of several risk disruptions, the chip watching key most chain challenges are the immediate. global China and chain

are teams of our time. on disruptions these orders drivers, navigate supply to upstream issues, day lack working their Our to and night and customers ensure the port get

impact to-date, But recognize direct it back have monitor the bromine with hand We with either auto the that been or lithium industry seen also to continued not orders. to situation And with shortages. Kent. chip a on to that, shortages. We has struggling our global we those I'll regard

Kent Masters

end I'll Scott. XX. prepared Slide our on Thanks, remarks

mentioned, As outcome we But Albemarle growth on that of ultimate of the will to the strategy. arbitration focus Scott by the are execution outcome disappointed our dispute, of decision. regardless continue the Huntsman of

Investor disciplined and effectively And our we opportunities, a objectives to the significant that will as and will and these we excellence, we provides efficiently, in us as well implementing pursue approach are allocation. our across growth on capital operating opportunities to our during have to remain highlighted our we businesses. with thought we us September, Day execute the model pursue model, of we out a This focused way help framework target Albemarle ahead. As in be

resources, priority financial this value our flexibility capital but high shareholder of Utilizing XXXX. will bigger, accelerating with take adjusted by we triple Our growth. means future that and will annual approach our primary to is not cost believe to just create return This opportunities. get advantage low invest tangible maintain EBITDA we to

the core Finally, this is of at all of sustainability.

With able largest like producers to our and the innovators, call and customers hand stakeholders. for questions. As the sustainability were we for I'd lithium over that, X Operator. value to with outcomes to of open closely create world's I'll better the drive all work to

Operator

And to time, you ask Thank this gentlemen, like and question at ladies this you, if Instructions]. would a time, [Operator sir. during

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

Matthew Konosky

additional for in that ramp first that's that qualification Morning, this maybe case the the with commissioning constraints of is the past, take Kemerton to is to on John. you going end a the supposed (ph) its for Or able done be it line and going to Gawronski at still this process. due Matt XX% on mentioned In construction XX% some the to now? capacity of this Is year year? time following to right

Kent Masters

through that after the get to we we've So mechanical completion I qualification. commissioning think then got got

construction. and probably those labor able after first little labor that a mean, ones I'm so, -- think after around onboard, We've what think primarily I a then, construction. then in we've sure, would that that's That's is are and real -- be we the and the going but to said -- think about And to targeting. and may -- market but with and months. is in and I to is all be process. So they're staffed X-month operators Then what issues tied, that's the the XX% the commissioning labor helping we're XX to around issue we not we'll that, maybe ramp want, we I we fight keep got aggressive,

Matthew Konosky

opportunistically your growth or then, organic of could opportunities? And just Is mentioned opportunities. inorganic impact HUN the hold you Scott, arbitration ability to you. take Thank issue that

Scott Tozier

really -- more I truly think it's X. Yeah,

our And it's further some inorganic of but type to or the larger on partly the sort some ability do. to of need do any is, financing projects. our it, of would drag. think of it's big -- of accelerate sort side, organic clearly, able a We'll be more be would to I accelerate second type then creative

Operator

Juvekar P.J. line the from comes question next Citi. Your of with

P.J. Juvekar

Yes. morning. Hi, good

Kent Masters

Good morning.

P.J. Juvekar

that? are expect any your next you gain what you. lithium are up you And double-digits. -- this into be Can comment to even and on will year well for sort year? contracts do year, next you must that early into look down, XQ be price renewed as to be that look into of have Thank now flat So negotiations? in percent you of expecting prices forward you And then,

Eric Norris

So P.J., to good your I morning, want it's I Eric. first make question. understand sure

Your QX, first said? you question would that what they was, in be double-digit is

P.J. Juvekar

Yes.

for for double-digits QX well As into pricing. your

Eric Norris

concession the rising have and through spot a year last this business and the year priced is markets, to we flat-to-down were that about lowest up gradually to Those it's is been fixed The of agreement. factors, the portion think late our exploration early point the progressive gave to be which due of price the movement against X of gone is pricing those the second sure exposed as significantly at course year would and and for just throughout that comment year. the year. the and their X has throughout way we've you're gone know. prices the aware, long-term And -- is I'm that Prices

So that's XX% trend. increase was a Day as XXXX. certainly, that we've Investor And XX% gave for progressive the year, for at guidance XXXX at Scott year-on-year least versus to given, next

year kinds to So increases certainly happen in versus of could see ago. those a you starting QX

P.J. Juvekar

you Okay, that be great. why prices talk Rock the so China? about at concentrate just then restarting rock? you that that? on that be And And skyrocketed, then line? X would you're Would [Indiscernible]? one have marble, just Would lines. Can of in X where

Kent Masters

Yeah.

capacity over facilities time, the Kent, and to but ramp I started we're it's get P.J., convert. it's so going think other our really So to we'll one -- on

the we'll into I products. do to haven't I exactly mining Initially Kemerton. rock not So worked into -- convert rock that finished guess we really the market, spodumene And we're logistics at to mining are. what out we're sell spodumene mean,

So go other that to product Kemerton. to and may China go products

have sourcing the balance tranche of of our our product that in but just we to facilities, world. of So part the next that's

Operator

line from Laurence question next with Alexander Your of comes Jefferies. the

Laurence Alexander

Good morning.

year? can of some First, any how much of headwind have we seeing? was demand you magnitude the bromine larger-than-this-year you on the next given year, discuss for you And trends for you're the this sustainable pricing, chlorine sense the of give that can that context versus headwind feel so better the transitory

Raphael Crawford

we could the pricing for in as the think, we chlorine materials we based get and terms of year. to in of probably get transitory. I more we're of raw and more a that price to that pay And the it's on forward. to pricing, in the year, It's terms timing chlorine impact, issue. next than is of We're figure that probably absorb different price us most a this ability going going managed

So see throughout woefully impact in that the you'll year. really next us QX year starting

Laurence Alexander

year, next And much with that the or recovery the then how with ramp-ups production your coincident of should Catalysts, be at -- lighting refineries?

Raphael Crawford

driven Raphael. Hey, is FCC refining to to correlates Lawrence, this is that very and miles The output. business ratable

is standpoint. volume I as from continues So improve sequentially a think FCC mentioned, to

see and that there's XX-month you a one to first usually So is would hydroprocessing, lag XX lag. on which

As capital availability more get refineries for conditions reinvest outs then in in change HPC. to improve and

see effect. [Indiscernible] refining sequential that going more But improving. the products, very a overall, we so that as So favorable with see we has outlook performance improvement, our we We're that conditions forward. see to of tied lag at

Operator

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

Mike Harris

for sitting related lag why EV to X If Mike I around sales there might ask Bob. quarter storage actually, a the X sales, Harris in potential leading? looking could, production behind maybe actually is Yeah, business, the energy Lithium those a the this question at versus is

Eric Norris

of the simply cathode The battery. into Lithium Yes, in that's formulated a is car chain. course just the good amount in ED nearly -- cars are And is electrode of assembled into put the Mike, world. that a -- battery geographies of production which the it's Most involved. points around consumed into It's so Eric of production of length that and supply an Asia. cathode still various produced material, is the length of factor then and then put the it's here. battery and time all takes then cathode the an the the a is

just the it's of chain. the supply length So

but we -- well-positioned, in we're lag, the see We to that recall we're anywhere are world. supply able

well-positioned lag that given are we So of grow supply industry, but -- there, with chain. to look is to length the we the the likely remain

Mike Harris

it. Got

And a recycling assumptions around about helps. just think as at when all? me guys perhaps That any also, follow-up, Okay. made of you your the have business, lithium give I of on idea impact recycling, potential if an kind and then can what you

Eric Norris

life-cycle automotive looking of phenomenon follows the Recycling have batteries. that batteries production. of end the batteries want of warranted is the on reuse in to of most further a given XX-year lag And potential factor produced and life is at. you're to That's still for that kind

needed batteries When as produced be at that, in of the wouldn't still, small of considered even recycle today double-digit So ten double-digit lithium low decade look on. we coming we middle becoming into the chain see the and decade by now. maybe fairly back years of a for of reaching recycling by amount wears a until being from that the means important XXXX. possible that stream But supply amount the amount being

Operator

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

David Huang

Xst, is XXXK of This strategy [Indiscernible] guess, hydroxide China? I for ton you you're there. here Dave. feedstock capacity David Hi about can lithium for adding Huang in your that talk

Raphael Crawford

I'm sorry.

was the feed-stock So XXX for the strategy in that projects China? new

David Huang

Yes.

Raphael Crawford

Australia. with said of be coming out our they'll [Indiscernible] So

David Huang

there a secondly, XXXX mean, those guidance? or are incremental do [Indiscernible] then any And headwinds [Indiscernible], your or for still provided, tailwinds you you to Okay. I guidance especially standby

Raphael Crawford

Yes.

guidance our the since Investor updated haven't Day. We

our through going operating we're plan annual right process now. So

in fourth earnings guidance is we'll fact, more call. next our quarter and In next you a meeting definitive give week

Operator

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

Female_1

taking of for Hi, is [Indiscernible] my (ph) Bremer this Joel, thanks question.

to benchmark going? more in And discussions be discussions us pricing? can going are on little or 'XX 'XX the move how mechanisms give similar XXXX, listeners are there a you more bit pricing color to pricing the on then, to in a is just back with contract your Just lithium

Eric Norris

our are gave and So the just the with generally with we're discussions remarks moments increase -- next Bravey year the aligns speaking, the ago. -- in price having few for that you per (ph), a customers guidance I

significantly We back book contracts now. the -- some either -- long-term for years are we've basket, agreement, variable average to looks contracts portion cases in of we're those component And can. had fixed the than is for going many our component I higher a then like there is well, those are contracts the back Those is to are price of and variable have some should the have seeing that of XXXX. a under say, going there no those original that that but exactly which one other, contract

We increases. see will also

are And hard on China that that. the piece year-over-year big business. in to that an would are next those we increase next just of year. to And Some annual then we'll last that's deal as seen The nomination components because part roll our rising into possibly are extraordinarily of some early be China indices. contracts But say pretty a what high on upside prices basis, an on to possible, technical-grade see have prices we'll year, next rises see year where upon the year that -- based now. spot a increase in right good to nomination. particularly a -- a already tied continue the this year, we've see we'd of we increase max finally, variable Others adjustment

which that to give customers discussions are upside of our us components will with market conditions. types the So we're increase having and are leverage our those nice improving driving the all leverage,

Female_1

you're like into carbonate want recent investments investments helpful. commentary, certainly large with Thank And your hydroxide. versus that's in then I how guess on I tests given hydroxide to of incremental that the Okay, focused demand background, upswing just currently. about mostly in just seems you. understand thinking It LFP are

Eric Norris

an trends. chain and a We customer closely, down customers supply portion and sweet and there we with the discussions this those we believed analytics has in monitor have and vehicles. a while well And from OEMs through vehicle LFP is we production -- there cost to occupying LFP assess spot has producers lot cathode costs our up uptake where of in is lower been of been driving vehicle the demand, that is confirmed an dialogues uptake all as way very mix. the outlook back What battery in range, and lower electric in range for is the lower see also

larger on For nickel hence, we for that we some cathodes. can't bringing of to And We're addition well-positioned. hydroxide demand be tons -- their hydroxide in extremely And - albeit as we're coming well-positioned the we're XX,XXX products, feel demand capacity strategy see and a still carbonate earlier over X years. both the expansion line, to ramp high that in see have meet we the others. speak. we describe producers Bottom of Kemerton higher they LFP growth both rising and rate mix percentage will than pretty will strong we those be automotive growth the in of feel

Operator

the of J.P. comes Your Morgan. next question from line Zekauskas with Jeff

Jeff Zekauskas

very Thanks much.

XX% up it next or to lithium your described market to more XX% representative, up prices given conditions, could XX? You've year. perhaps the as XX% be being Is XX%

Scott Tozier

on is of is the which around the of around there's variable up you going our fixed depends, business as [Indiscernible] Jeff, gave. it concessions pure market component might There's to price, these Well, portion a is that conditions. to is think business, of The going conditions. our also anchor -- that a there exploration market on contracts, I the the even think, majority long-term exposed while we be of that because

think early because probably to say above it's to XX%, XX% XX% to we least price point, this our what at So too at about XX%, guidance was

Eric Norris

Right.

Scott Tozier

earnings the quarter we February. as get as you have in into on wears the and provide to have we'll discussions that the that So call call guidance we'll continue February --

Eric Norris

driving that Okay. Then Is it's and for August, they're it? maybe bromine where you Asia you going on China, XX%, in speak representative at What's like the prices been follow-up, pricing not see what's look since it's in representative when quoted or bromine up a it Can that. for and market where in to my going? a price something I price?

Netha Johnson

Jeff, reflection a this Yeah, couple things. Netha. is of of a That's

is demand clearly produce raw and are to all, market, up being of are products pricing across brominated the First that material up, required.

seeing an driving that's increase what of amount So spot the you're Chinese in price. is price enormous what's

Operator

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

Ben Kallo

Thank you guys, morning. good and

I you love enough One about hear -- customers, chain. bottleneck are security perspective is how the are an overall guess, Will enough wrap Does -- diversity sales. materials give is up. be -- scale that's as does your we [Indiscernible] people copper a your guys you maybe other that If Thank over reserve, meaning, supply competitors view then, there for Just for And nickel? production enough of and with you. there that reserve, being approaching the your things [Indiscernible] in resources lithium a EV more you risk? that your your how -- I advantage and of to thinking [Indiscernible]

Kent Masters

so investing bit I'll we want but some -- we maintain will comments, it, our that has We about strategy. little talked talk and been detail heavily a then add to lithium, share, that to on which weigh 're to know nickel, up demand make we just copper, in keep few can Eric that, I but don't and with a our

Albemarle of security from and particularly customers. customers key a our with around the along And investing supply to proposition has part their we're so been lithium. always And value

resources, the shift over then the continue as of and the we evolve carbonate you hydroxide have locations to we produce, those where mentioned, diversity and we'll time. As today, market of and diversity the chemistries have we --

lot constantly build and value around that focused So proposition really part that with supply, of of customers. key think security a we the talk is about that we of our I network the is

Eric Norris

around discussions significant the that you ones material enough required most add closer ones The to sloping security The out it's value the to commitment look at the to a we investment risks. to The enough new at that's on that going but there. urgent higher are quality desire OEM. the are of costs. in And deep you automotive there's existing is That's as just fact on bring I'll as target. out points ones the to upward Then There's material, and curve various is are go get would the and customers issue cross would get we've the there of we lithium resources with I having be partnership. side lithium that for and chain, capacity, discussions lower that the we're our tell you both there. lithium new had, and

I record think track that discussions for so executing load automotive the think of for gives I partner advantage a where base sure. of us being firms. And And our land of and sort battery these many as us that's

we do So advantage have sure. that's think for I an

Ben Kallo

you you It's to Thank So picking are get it are picking customers And than not ourselves guys. you, here, customers? or allocating point to ahead a too you're that? you more thanks, but guys. that your about are at like is they

Eric Norris

volume the not of So any we we that anyone the is who we risk and side way, the to say be a a why merit buyer battery buyer in partnership getting the buy XXXX. -- the I roll would not be they could committed industrial have the tech does that's as side, would on in is that long-term -- because do, could into a discussions spot so us like grade on that

the partnership So X supply given they in that securities the we're having in discussions points that's is supply, now. years will desire coming basis are things be where time for that tight the in quite right tightened, for that the

Operator

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

Male_1

[Indiscernible] Thank our for Vincent. for you on is This to taking you Hi. question.

discussions of back you've the have alternatives arbitration, mentioned discontinued other to Just in around to curious. know What you are I process. Huntsman there settlement. terms started

a other this? we then are the of about And timing legal what think how from all perspective, -- other should there? of alternatives So what

Kent Masters

a think process. an to there's much it's because active I too range. going it's Well, we're not get And -- into

arbitration to either it's process the that So initiated a from or that options the we've time frame -- is those the matter. that is could potentially we able are be agreement would discussions and that it's and -- through But resolve wide. it we pretty pretty reach

Male_1

given will just and delay, And would about be volume overall the next Understood. allocated from or or ability the fulfilled we volume terms that -- tolling we about lower be longer tolling? of be that will those contracts think as margin year, how Kemerton in should think less XXXX, X to think as how and fulfill we then about your more through particularly Kemerton those

Kent Masters

get make to plan. and we expect this quickly. that that to Well, speed to quality and I the the be with on us we'll we've up do But standard stay we our use two will think be -- I our aggressive rights you'll expect get to to Those it to mean, we will with want. around that. done, acquisition relatively methods tolling, will -- fill that that be see you that there we some and

Operator

Research. McCarthy comes next of Your the line Kevin Vertical question from with

Cory Murphy

startup the wanted the to maybe on to Hi, XX prices, then like not follow and Kevin. in you Can understand three it take looks think months? XXXX. is Wodgina, production it Are on was there's the good maybe sell or earlier of reasons quarter third restart me morning. to to I are process Murphy wouldn't question to to? or seems is it Cory able on about one And said you start going start spodumene of I lines? it's try delays -- that the market line all were spodumene or why up upwards given PJ's you starting to contractual you the help you X This spot why for what up

Kent Masters

is on Well, it long-term and selling it's finished have want -- arrangements. make that to the reasons, we we spodumene, convert sell and commitments really products it's we'd where the to customers strategic

where -- conversion it we capacity. going, is here our degree, then Western you mines really to we're mining, that's in -- Australia, to you've but -- referenced And some and in it first yellow train the spodumene lead up our labor line on -- in in operating there mean, necessary yellow necessary equipment, face some or issues got timeframe in neat timeline some of then these is that might the time on we not at the the whatever we with that. to some there, sell do the we call call to they of that things that's -- to that going the I it same Kemerton equipment It's we big and might the time then lead get strategy. So And X be really other. starting that's do start

Cory Murphy

there's very you're as tolling That's some that. you would think or labor ask labor then when to bridging It How about Negra strikes Chile. anticipate contracts you La just And helpful. more the Understood. capacity to do your tolling with rolling tolling And in tolling? related the startup? I like shortages off sounds volume due wanted said I to well. trend without

Eric Norris

say I a bridging. tolling strategy is we We use for would Well, that. do correct. is Right. That

continue now. Kemerton. the mean, purposes for of purposes expect We the but a strategy, Negra, to I to extremely La And And we quality. partner because we take -- Kemerton advantage that year toll I right -- it's market bridging Look, of is have qualified that good someone a is for next we strong spodumene also long but delayed, the tolling has can there's our we been with of. trust as relationship, as have

market of bridge business a that's take advantage can and together, take relationship before have of We strong advantage then to the we'll collaborate us. we both that, where

sure. as variety it of for next to year part purposes. say, of So When off, have I hard think a it's it but rolls we for me will it's

Operator

Co. line Rusch next comes Your Oppenheimer & with from of question Colin the

Colin Rusch

these I'm is Guys, customers. your patterns this thanks you curious And information. about of cross all so [Indiscernible]. from the much for a the order

individual track sell-through seeing sort for can you're customers. of If you all of any the or track double those ordering that

be any trying or build that seems some could to it incremental they give Just some really that like to other trying character folks inventory mean. demand or there may

Eric Norris

Eric, a -- perspective, would of supply we're very from we -- aspects there chain. the say Lithium touch all I Colin, that is

discussions customers, see And are they ordering. hand-to-mouth. don't know any that And They have so buttress any say I remark, our the we don't we I to would furthermore, double inventory. that have with

when crisis imagine around causes causes well. does existing that which arrive, for for we're we us, not supply it at with you target this that shipment's -- always customer. or able chain, a So and for the because it to precisely global the week to -- them If pain can does it as if the day know the going

a very tight market it's still lithium. So in

Netha Johnson

their to sites not that seeing We're bromine. we've court. things extent at anticipation it a double deliver not been we Supply disruptions. to can tight window of can and build with. inventory Colin, difficult, manage to within are trying are to they a supply in ordering Hi, chain certain but able where Customers any are chains live

right more at orders double seeing not inventory to by try this we're those customers time. or So build-up ordering they need than

Raphael Crawford

Catalysts, either, Nor in Colin.

Colin Rusch

folks some chemistries you guys kilowatt you of optimize the you then figure to out And of are And guys. hour, content battery per on the Thanks, steady? And Are lithium that? real are as seeing that on Certainly lines level any these trend decrease, content to looking hold peg where Okay. seeing just some change. increase, how right would materials. now? lithium

Eric Norris

it a at year material enters as XXXX, think as sit I on years would any part, change. side. most of the Certainly For the the equation period here expect the and we anode seen prelithiation over we look we've

technology significant energy anode our is content those on density, As does, whole it obviously lithium of here further seen I as you trends that. really definitely haven't it's sit and point are but the basis in today, change increase or well, progresses. during technology solid-state on as the think a innovations. XXXX, metal quarterly the which the and as progress That's to But I technology going alive necessarily

Operator

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

Arun Viswanathan

for are on huge you the this X Are of then when have when and how more in do kind here. thanks ton And taking a far more in the contracts, closer my contracts spot process XX I you now spot? or curve question had I in or seen do from those line length? Thanks. Great, of are you rise the question. I'm just bridge on Are guess -- years? as as I contracting to reasonable a something contract you side. lithium your hearing $XX,XXX justify those divide cost and the increases customers extending out would plus you you X you price contracts to asking. that where with just per between from going material the guess What

Eric Norris

increasing. customers is are of the from duration say that I requests -- there would

Those Kemerton or supply or past, the the start on XXXX, that The the could which discussions we against are future be have road plus slated years even average in either the even XXXX. current they or our described, X-year under new would about and in expansions, in expansions mix. characterized contracts we've Kent U.S. think X down expansions it's China don't I to discussion, until

time. discussions pricing about or 'XX that with can behalf of thinking having if not against spot -- we're can the their prices. a on 'XX. say an to much side. future, have investments you see pricing rising, for the contracting that 'XX, stability into higher automotive So increments are fixed by imagine Those so time discussion either some and we're are made either a driven on reality of are the From they certain what it standpoint, those people the will is price the desire because to the pay to buyers who or towards index they certainly there's to in pricing established is prices customers they want 'XX But durations term, rise kinds with of largely are a or that's

look pricing said a a at you the high pricing the indices low into of was is people basis a blend, when China not well a quite if lot as it's against and you is, price XXs, ton, When the U.S. of you gave is in so not high, on close the most delivered are the indices $X,XXX price buying Now, are. a but in around pricing spodumene teens, what these XX XXs of the around to still world, of that remember the many on a those the high basis.

contracts -- are than of some we're what which significantly the we continue at price long-term leading dynamics to with play, in but customers to with potential those a seen have and So higher past. discussion we've the are -- us

Arun Viswanathan

ask front that the guess, then, or question so? And guess next if -- two Chile the any in month about there's wanted Great, thanks broad on political I a I for to yeah, just the that. it's -- in you see or risk --

Kent Masters

and are There's operate there's risk Chile, rewrite it in we happening political lot there. constitution They the closely in changing. definitely so things a watch and Chile. we And

the to are happened, we close, they changes Chile. and So and rewriting see but their -- We what's we're pretty government. there'll be in constitution we're close

the wants lithium with think their have industry. as go to agreements they contracts so participate very us looking expand The up. progressive, -- participate participation. I They're are prices in Chile to they

So that's them. for an upside

economically. I Chile But watching to moment, in So closely. they're lot believe that we're going to want happening in very participate a there's they -- the it at and

Operator

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

Matthew Deyoe

Thank you.

opportunistic. of But continue so we Prices like to because this get to So are but, at you I attractive delve and on seems might the more be to know converters of I a that potential why little kind have overheating and your read you're spodumene enough bit bit want maybe actually capacity to supply be if merchant Almost more as right respect, the with Greenbushes. little touched sitting feel really on you of regulate amount we X. X. I latent some it in relates somewhat like concerning think: a strategy struggling markets have aggressive find for bridging in now a to And to fair bit the that operate and are to to not little on tolling. an can it into I ability said over-investment bit. volume, you a a etc. -- it's a things volume?

Kent Masters

Yeah.

-- our Eric don't can't to them. it. customers, and a So a qualify we I'll we because on We some going -- turn just can have they make we to on are toller add color comment,

a And those there. with not would qualify there our customers. of process all tollers So is

not we had that it's can't them even -- we It's So simple, quite just if not products. on. the turn

and forward, that more spodumene a or qualified currently have ones, but now before our we talked give optionality have So ramping spodumene people, been with Eric choose we we're previously sure they're they're relationships going. from with and to it, make us that tollers could going about customers. have It qualified getting still standpoint we the

X of It elements to little have that. a fit a in So to -- not ramp It's those it really months implement longer up. take all be you to a going would into it's it to strategy.

Matthew Deyoe

Okay.

Kent Masters

[Indiscernible] anything?

Eric Norris

I -- -- that are as don't I but there's think conversions serving these being think there would if customers. industry, well. several partners or you doesn't [Indiscernible] that of mean, are our for consider the our we only handled who meeting standards in people

So there's that's the why a process. in that length involved qualification

it -- if serving discriminating advantage approach very opportunities, when customers. from comes but to we our of that we're we'll in So there's take them, how a

Kent Masters

quality -- And me, trust for supply Yeah. customer. The again, that to us the of is, for key customers us. have security for

specs we going sure that our as So customer's standards to meets and make have we're product if to our well. toll,

Matthew Deyoe

maybe with Fair absolute know if at in correct Chinese on but it's you're point. And it's seeing. look directionally we with price, almost But got it's question. I an what there bromine consistent you or not the past been comments basis, Jeff's

So case capturable I'm X-year move, not. should think and room given or to the would It lot X-year of process? X-year a process, capacity? as not this in of higher a But we as well. real if offset this the that's is And any like move if a chlorine so, seem sure process, a there's costs

Netha Johnson

think It's supply outstripping way, supply. meaningful said those that period Day it's This additional demand. sure I'm continue demand to things have they not complex. see the right supply. real supply others so almost what's driven similar The demand will Yeah. bromine Yes, that now that's Netha. a use, question's announced But and processes we in continue. are our you'll are we the and that is on Chinese really really prices for The want to is driving X takes bromine by outstripped what It to really the in to exceeding years Investor and and by bring We've well. up. add, is much. next we how planning we Demand as price and

Operator

Your of Christopher next Parkinson the with line from Mizuho. question comes

Harris Fein

Fein Chris. for taking my question. for This Thanks on is Hi. Harris

per its be should be comes ton. Turning a to thinking production cost of that out How we spodumene of the when is own it back that's Wodgina? then to back Wodgina, with that so in comes cost the into that about how thinking should understanding we cost associated Greenbushes relative about bringing class of and

Scott Tozier

is This is this Scott.

but so think, it lower you does operated have but said yet, a spodumene, right? believe be in we haven't will concentration, costs do I be relatively it as it's world-class, Ultimately, Talison close. world. Low it, to going Wodgina, we the won't it meet relatively close.

Kent Masters

Maybe for talked capital guidance about joint costs about the provided, say, to And the this, was JV. asking them ramp in yellow Scott, costs We've and I we [Indiscernible] Harris the ballpark. the that how It's acquire both to flow. venture we've in there. equipment and think, this captured capital cash largely

Harris Fein

And that disclosed, so the them announcements you've that have really of actually far, then X in been planned a it. China. all Wave Got are of made lot

you a expect most the on I'm market I'm not high make of those So was focus was to towards whether other curious tons more whether costs so to of it strategic much And or rationale capital what And or or the into China. you or wondering drifting matter Chinese lower markets. nickel. whether stay their way not see domestic

Kent Masters

Yes.

we think I mean, detail, but the we Eric then see capital see today. anticipate see and moving not driver. we high North go in invest market exported of probably that's can mean or forward, as I That's America want about the it Chinese mean, at either ahead of But chain then to? we I some that see -- we mean, I And and you the is then will the as So but driver, China Europe that hear serve you I for to there. the is the that level, seeing to we west, then us The get do we where market market costs as we lower it. invest -- into shifting be -- with And that. that And it's battery can well. kind supply And Eric, then west. talking near-term, degree, will today. product

Eric Norris

is think You market, half of the increase today it will of between middle look percent you well the that at I and the and China if production cathode of decade. on know, of now mean, over world the I

China world So the center cathode for technologies. is all the of

America -- because supply is. developed to we there of why developed. chain market Now, production centric, will - come to where up battery China design The Europe. And to is ultimately we many being continue into and North focus are those have that and that heavily execution serve in Asia being match times, that's prospectively as localize well capital a of largely and opportunities supply an as us wave the we X build grow program and repeatability active more of will of with that addresses around those that it's we And large will the are But said part the a wave -- and Asia to us. to many we've X It's to plan world. the Western region Asia bit is speak resources the Australia, also as where our but world. in a in that's opposed

So the as our with that customers strategy. expand all to the look we And elements play forward into they those are West. growing that

Operator

to There Kent would Mr. now over for closing like are turn Masters remarks. back no questions. I to further call the

Kent Masters

your on thank And participation again Okay. for Thank our you. today. you all call

team look and and when results interest Albemarle. As thank with full-year our extremely detail concludes year, forward updating on outlook. call I more end objectives for in we February you has progress the the you in to your I'm approach This pleased focus announced and XXXX demonstrated. the of the provide and our we

Operator

today's your you in for participation gentlemen, and thank Ladies call.

time. may You this disconnect at now

Albemarle (ALB) 4 Nov 212021 Q3 Earnings call transcript