Earnings call transcript Q2 2023

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Operator

Hello, and welcome to Albemarle Corporation's Q2 2023 Earnings Call. [Operator Instructions].

I will now hand it over to Meredith Bandy, Vice President of Investor Relations and Sustainability.

Meredith Bandy

Thank you, Aisha, and welcome, everyone, to Albemarle's Second Quarter 2023 Earnings Conference Call.

Our earnings released after the close of market yesterday, and you'll find the press release and earnings presentation posted to our website under the Investors section at albemarle.com.

President call Tozier, Kent Johnson, Chief Specialties; Eric the Officer; Chief President on are and Scott Storage and Financial Norris, me today for Masters, are Executive of also Joining available Energy Q&A. of Officer; Netha

applies some constitute reminder, made statements note about cautionary forward-looking outlook, statements. financial release to that in press in the including can and also timing comments of which also be materials. forward-looking during call. earnings performance language expected note Please this company of and our some call, statements expansion today our presentation, Please a refer measures. found As our of this earnings to our guidance, projects, non-GAAP contained may the Reconciliations

to over Now the Kent. I'll call turn

Jerry Masters

Thank you, Meredith.

results from net trend quarter second same last EBITDA XX% positive the up sales last versus continued with period up the and XX% quarter, year. Our

We have market storage current energy for on based outlook XXXX increased our prices.

long-term to established course, Of is ahead Automakers growth. are well growing. and shift accommodate future planning the to that electric vehicles

we strategic metric a agreement XXX,XXX to over hydroxide supply lithium of tons period, a example, starting in X-year signed with XXXX. Ford For over

performance auditor gas water and and Mining as requirements, Assurance. reasons that fair the third-party to rights, In topics IRMA of site choose the for and over Salar an audit of our report by Albemarle our human work. greenhouse a is audit XX% published sustainability. the Atacama covering lithium Responsible level our IRMA, became achieved management, of Initiative site complete Salar commitment de rigorous resource terms first independent an customers labor June, XXX We the in of to One world XX IRMA the have verified its emissions, met such

list. inclusion Albemarle's quarter, Companies XXX the Fortune TIMEXXX by and in growth the the recognized Most during in and Influential the transition rankings on were energy impact Also

in and improvement on reached We future demand. mechanical The continue yield long-term schedule, capacity schedule, the in with ahead XXXX. China in meet is Meishan completion Salar project of to early expected invest project completion to mechanical

Last with update month, presentation. on in simplify agreements amend and I'll later these Resources. the joint activities venture announced you to we our Mineral

And results. for through over you to to Scott it walk financial now, our I'll hand

Scott Tozier

EPS Thanks, Kent, our review and driven storage was $X.X sales second income Albemarle X, prior higher up year. everyone. performance. approximately increase volumes, the which energy Net to This diluted were also of than more compared up On EPS almost market and billion $XXX Slide XX% hello, pricing XX%, a and let's nearly to XX%. year. almost was as Diluted was both attributable higher last to were $X.XX quarter up compared result last double $$X.XX, XX% year. up million, was of billion, $X adjusted by Net

principle on of to to our conduct with in prior reached end matter in we the disclosed initially agreements a in Department XXXX. catch-in occurring we Justice of July, that At the XXXX related business

QX GAAP accrual matter. $XXX an to this results million resolve Our approximately include

Looking Slide #X. at

as higher was primarily of well Storage. in higher billion, volumes XX% nearly quarter increase over year-over-year, adjusted pricing driven EBITDA Second Energy by $X as an

Our claim insurance Specialties [Technical pricing costs. receipts in lower and due energy markets down related end to and weakness and as business certain year-over-year electronics Difficulty], such volumes lower was to

company total at look Let's updated Slide the outlook on X.

prices. EBITDA XXXX are sales adjusted and our lithium to net We current reflect raising for guidance market

to of in range of price remainder constant to the result, the the $XX.X We net we our recent billion $XX.X lithium market for of billion. practice, as sales. XXXX are end guidance net been the indices the lower now sales have company a year. And has expect for this increased As assumes be range total

as we quarter followed an quarter volumes. by sequentially third increase net energy flat in relatively fourth net sales expect sales We storage to be ramp

EBITDA also to EBITDA adjusted from of to margins our to range guidance the in previous $X.X XX%, full implies in range increasing year XX% $X.X up be the billion. are of guidance. This billion We

reflecting Our XX% of the full improvement year $XX.XX, range XXXX of year-over-year adjusted diluted EPS a at guidance to midpoint. increasing is about to $XX also a

net range operations This from in to $X.X We decrease expect outlook primarily be cash of our billion $X.X the X factors. driven in by a is to billion.

to higher of shipments. be of to back the timing expect the volumes. cash growth projects of and our QX, to capital working in tolling convert storage will the year, accounts year-end, which This First, sales now receivable is early in at related particularly energy to higher half to towards volumes our the weighted We in lithium due expected result timing XXXX.

the Second, this million of $XXX made payment outlook year-end. DOJ approximately that is assumes by

$X.X has revised guidance billion to the Mineral CapEx increase agreements billion. Resources. increased to reflects $X.X This with Our

Following in XXX% is spending these lithium ownership of Kemerton, Meishan forecasts. and from with revisions, the line this will Qinzhou maintain Apart plants. processing change, capital Albemarle previous

to increasing We're energy Turning year billion for in to outlook next XXXX to volume range detail of and $X.X guidance the the to net Energy execution. sales our project successful XX% the the of increased end our range Storage tolling on $X.X billion. segment. of storage higher slide XX% is to at expected be be to previous full growth year-over-year by more thanks

of through increases prices of rest pricing recent assuming continue at We range to be the to project year-over-year, previous XXXX. of the XX% end also the average XX% market lithium realized higher

to Storage billion expect more expected than we is Energy higher-priced net due $X.X to higher which $X.X the XX% for This to offset to EBITDA increase inventories. in of timing the to sales, Adjusted XX% of billion. increase impacts is spodumene range

to in are elastomers our only demand in by end agriculture offset strong to continue Similar see partially is we other pharmaceuticals, industrial consumer our full like and other year oilfield markets and services. the In and electronics Specialties, outlook in chemicals companies, Weakness XXXX. for markets. we specialty pressure reducing

expected million. be the are sales $X.X EBITDA to We and range reduce and planned maintenance market maximize quarter to of inventory the took forward efficiency half pull is be the in in the weakest million to $X.X to flow free year. cash of and XXXX. QX adjusted to Net advantage is and billion of slowdown $XXX billion, expected now the anticipated between $XXX recent of second

Ketjen's EBITDA adjusted be in refining not insurance increase expected is is are to and This XXX% as the well prices primarily over recoveries, XXXX outlook year. which recur, prior to ongoing improved in expected to XXX% full due up costs. to processing recovery as year

our rebound most customers. mix net of a strategic Storage market under reminder, to XXXX XXXX spot. we've sold other recent to There's sales reflect expected long-term is and structure index these of our change prices. with recent contract price XX% been As contracts full our Slide mix volumes are Energy philosophy On variable updated contracts. in the year X, lithium now to contracts be XX% our no lithium net sales pricing, expected referenced Due or to

Our long-term deliver on strategy growth track. remains to

Turning to Slide XX.

more of We the of We of to expansion, anticipate Negra in plus additional volumes in nearly additional XXXX, higher With Albemarle triple continue to volumes volume assets at XX% to XXXX. on we track Qinzhou range, to conversion XX% and that tolling. end now in growth a asset coming expect range We La conversion sales the the primarily XX% than still acquisition XXXX. the year-over-year XX% by in III/IV remain Energy Storage to the driven coming between in anticipate sales CAGR tonnes. XXX,XXX online

the margins around outlook prior prices. EBITDA implies XX% outlook from Storage XXXX, higher up Energy of for market based on revised Our

months our to are margins X On early year-over-year takes normalize spodumene seen least reminder, XXXX, at it at lags a to from very mines the late primarily customers. conversion venture. our in to to As from Talison go XXXX average, for our level expected through high related and inventory joint spodumene

Last of year, increases goods we spodumene we lithium reverse. prices sold. the in saw lag Due for faster higher than pricing time spodumene This inventory, year cost to lithium and dramatic spodumene. the higher on is realized

this we decline, than spodumene majority lithium the we impact to prices the are in recur As prices lower third realizing quarter. is going and lower expect costs, of faster

The next market expect the to Mineral to of is accounting treatment agreements venture. XXXX. Wodgina with product Resources, amended margins continue toll MARBL and item we the Under affecting joint during the

our from we The of a lower MARBL will but for a only about As the of is net X% recognize margin reported EBITDA. XXX% XXXX. sales share result, result

Talison by our basis. at in margins EBITDA are Talison. included is reported income our on after-tax Finally, impacted an net EBITDA tax expense

Talison would X% about be Difficulty]. If [Technical to you margins results exclude tax, adjusted

will highest return to our to to invest XX, growth discipline, continue with we Turning allocating cash opportunities. support flows Slide our and capital

Our and Australia primary projects of capital use the Americas. to in growth organic low-cost remains leverage resources our

process business of areas: recycling. technology for and Beyond opportunities organic core new advanced consider and growth, resources, lithium a materials, broad we our across also primarily range M&A battery for X

disclosed in not in spodumene resource the Liontown proposal previously progressing preproduction Resources, acquire an our has to indicative submitted date, Australia. engaged meaningfully To transaction. in the Liontown Board Albemarle As March,

in completed purchase Albemarle of over acquisition the Western International is regarded of rock of a as cash strategy Another just transaction world's our lithium mine. subsidiary provides we prospective example of the near July Power This that million. our best mine, one the Lithium Greenbushes tenements spodumene of exploration Lithium hard in with $XX

record interest process in preserving in deposit a intend This an track maintaining located rating. prospective financial And to of investment M&A a credit we to Patriot announced while Metals. and investment-grade disciplined our our a provides week, Battery higher growth in this investment return accelerate maintain X.X% We Northern spodumene flexibility Quebec.

acquisition as both organically flexibility dividend. support that well to competitive a grow Our our balance advantage sheet is us through allows and as

to over for a And update with it I'll back closing market Kent remarks. that, turn and

Jerry Masters

Thanks, Scott.

the call Excellence. reasons Albemarle operating of results We report is Way financial our we it One disciplined the model. can of strong

they that competitive guide approach. and Our culture, pillars words, X are our sustainable just operating a principles capabilities, discipline are high-performance decision-making. And aren't these operational

the and we've million includes operational highlight goal. next, over and capital Through exceed discipline, year targeted project I'll excellence. this Today, and track benefits productivity to initiatives that manufacturing we in $XXX business, discipline, which on and are operational

excellence savings realized the Our $XXX Across best-in-class with drive years. of goal our we million target businesses, and efficiency, of X manufacturing is next a value in operating discipline utilization to in to we're through optimize our and operations raw improvements better manufacturing Intelligence, leveraging materials learning manufacturing Albemarle machine Project call and AI, processes. our Through of we energy. which yield over

capture is pull enhancements and purchasing strategically logistics real targeting we in global Our million procurement $XXX productivity are With this team and time. to efficiency year. improvement, materials benefits raw continuous of sourcing

is Another under excellence. principle projects discipline capital operational execution

Project, is Salar on execution X project Improvement off Meishan, and including paying time budget, Richburg, on Kings on the Yield and projects focus Mountain. with progressing capital Our global

develop is that design to continue lower capital enable intensity. we growth objective discipline capabilities, projects capacity to at the faster world, structure, around build As the and approach our

an projects. In produce I'm Australia, battery-grade our into Yield Project Kemerton and products time for that Improvement capital XX transitioned on commissioning. recently has on Slide our report to subject more completion to qualification. pleased Turning to continues achieved mechanical to Salar of update I In Chile, customer

Australia, Western our in particularly While there challenges, to the they plant as deliver that very in team tight market are commission been proud and of we of have customers. light labor products our Australian

and execution. We we've have the projects IV and are gated learned what applying Kemerton to Kemerton of II recently III into construction

In now with mechanical XXXX. the is in up Qinzhou progressing on budget China, construction of on to ahead budget schedule, ramping And nameplate and is of Meishan capacity. on schedule and early completion expected

mentioned the acquire amended agreements, in this transaction amend agreed conversion Meishan have Kemerton lithium earlier ownership XXX% call, of Mineral of Qinzhou we As assets. year we to and terms will ownership the Under signed the with XXX% and earlier retain of the Resources.

Wodgina XX% the ownership settlements effective million half closing, Wodgina About Resources transaction in an about and a XXXX including purchase XX-XX other expect later costs. the to million. to date. and pay February in agreement year we This The after and relates is ownership Other to of remaining economic of XX% regulatory Mineral for $XXX related key in Kemerton. stake mine approvals. effect, $XXX is anticipated economic Upon is remain to we XX% received transfer in XXXX date the Australian half interest effective interest Kemerton of April exchanged of close this to transaction aspects the

XX% global the a and over momentum, Slide China to China year, June the XX% driven remains monthly outlook models, In the picked June. track growth After regained December. indicate sales expansion up sales charging last representing sales vehicle infrastructure. supply slower global through XX% On XX% largest year conditions, electric EV Despite resilient, chain new up Europe, has year-over-year the EV XX. new with sales about EV sales quarter for easing growth. the up mixed global have with start on the issues XXXX EV macroeconomic full have of sales for by introduction by and last year-to-date. demand of incentives since are lifted

inventories relatively market driven production. seen Customers Since the lithium demand low on chain after May, strong supply market in the in the destocking challenges few driven levels downstream backdrop well supply rebound by remains we and new have inventory are battery to as of Global a over restocking decreasing to EV bringing demand of lithium spot the returning lithium and by pricing in against EV months. last growing as with demand, increased projects. balanced, unsustainably

As positions Albemarle scale, we our lithium footprint, demand. to growing customer sustainably vertical global meet our capacity, to expand continue integration and

market to XX% on our that long-term to We're we're pleased healthy to focus lithium with sales within managing strong, anticipate While creation. earnings. are year that we the over last control sales and both XX% We up be the in things value growth delivering continue remains for XXXX margins.

the energy, markets. long-term moment, a assets market star a at EV we with in opportunities mobility, world-class portfolio in is and clearly the product and the connectivity leader the While health diversified are global broad

aligned our marketplace. values, only creates us advantage in and our not values an is to aligns sustainability on customers' also focus the with it for Our

strategy is and clear, both us edge capital how markets gives are economic operate growing our across an we in discipline how and our Our allocate we cycles.

With operator the I'd to to begin call back the to portion. turn Q&A that, over like the

Operator

[Operator Instructions].

first from Spector UBS. Josh Your the line of from comes question

Christopher Perrella

quarter Perrella impact cost on you third Could the of spodumene the and work through Chris on It's the and sales timing fourth Josh. quarter? for the

Scott Tozier

Chris. This is Scott.

expect to in quarter. the We'll in to second cost saw very impact we quarter. be we in acute the the what the most third see spodumene headwind the that's a quarter fourth similar So of

fourth quarter, to mostly in So the start in third abate and again, it will quarter. will it then be the

Operator

from of comes Patrick question Citi. from the next Your line Cunningham

Patrick Cunningham

the the focus table M&A South Australia going elaborate you the assets there the a strategic in in bit in Or early-stage we investments anything hard of maybe little Should forward? on or for Can expect these rationale Canada? rock on to the is America and resource be U.S.? regions

Jerry Masters

Yes.

we an resources little these a on when early think been from they're toward opportunities earlier expensive. talking mean, then -- get strategy we've M&A stage I and I about for while pivoting so a going also as not it

or but then stakes it more risk participate in to to so -- there's get to will we're not. so Now taking opportunity later speak. opportunity And an way analyze in door, as to the then foot allows in the information and it whether and that, we bigger we getting us our smaller have develops, a

if all is, Australia business, resource favorable for at look the the most where and us And -- there's Everywhere South at mining, the decisions. North we they opportunities to -- permitting, we do used very But it. U.S. everywhere resources They're it's little -- those are of we But Geopolitical, Canada, resources, we're we'll is. we're where America. but the it's I and stable. so stability, Canada -- really, the Western including that's than in America, we'll to try a we with, don't operations, North favorable, jurisdictions very look jurisdictions not geopolitical used to where those so to look bit are that resource are, when the North those and make America, balance we mining and but those. are And America. familiar the wherever more mining look, used for issues

Operator

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

Harris Fein

This is for Chris. Harris on Fein

So thinking Mega-Flex assets, you've MinRes the be out down about of the to you basically have bought facility line. now downstream your that

And portfolio? be you're walk-through footprint? maybe quick about if resource current could helpful do thinking the you a your about feel you to how do how So it additions would of

Jerry Masters

Yes.

feel we We conversion to of to And resource our been -- We additional at on, then like that time of of Qinzhou have. as about so we've and So we identify, that few out we and pivoting of resource given decade, need lead the to talking and the starting beyond the to But or toward acquisition the so couple identify need those were -- resources resources need good resources building that facilities we're qualify look, ago, end utilize a toward -- much conversion we with the we kind we've end about facilities. that. the we've bring pretty decade we organically. did a time. been about years additional talking

we mean difference feel assets. got simpler, we've it's the short between. out, pretty between MinRes balanced now. it Operationally, but conversion. huge full it's bought were So move we those that control We I look, wasn't of now better, probably little a a on

little our process we can Now on we're spodumene gives long, a to a quickly, but bring opportunities us that resource, we for if customers. can we -- find

some in secured have that participate them We customers spodumene. can and process way. have We that that with

strategy. looking a the the it need the in pretty and think and have resources. was good current long-term conversion We're resources. much decade. don't we I shift major of program we're We're those a resource close that, end still not after shift build our it's we But to -- on for So with more

Operator

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

Colin Rusch

supply I have and in you ramps? volumes are then second up? to guys question. of are perspective? around a a that can speak potential question And large that you that part to more to little slow fairly how you're U.S. chain bit considerations do How volumes bit as going simplify in from those Europe are areas little a the ending way that a as into you two the is move the Where a have OEMs compliance EV leaching handling intense pressure the One, logistics environmental process. see viability

Jerry Masters

Yes.

referenced. pick second -- up comment? really I'm Okay. technology Colin, I the not can you the you just didn't clarify

Colin Rusch

The the process. potential basically from rather for Yes. asset the than pressure leaching eliminating processes

Jerry Masters

want take OEM question? you Do the to

Eric Norris

make seeing would volumes vast of June. is is this EV We've pressure. secured contracted that the from is of mid-decade be may chain over would demand registered OEM through of the battery regard data promising market. needs that that's majority today certainly With based. July of I as More I potentially are sales Early and for models to well, strong. the caution comment certain slower, but U.S. seen their the through the year, part future first OEM the I Eric. headlines seen, looks seeing in quite through demand, just volumes, demand onwards. today supply in Colin, that growth Sure. producers. very -- of We've any would The strong China for middle lithium we're XX% so the we're on rest the the not They're market you small EV a is

second want the don't that, for know As I question, address if you to Kent.

Jerry Masters

Yes.

lot I look, it's a particularly autoclave on extraction of but and development, around process I is looking the think road. we industry have think, and process I the of one around effort we're investigating ones the the is at, R&D think that. chemistry But down

of focused we're our term, come. existing gains processes that in years around there we get the not only of significant we're sophisticated as more developed So we've operating on near we today, facilities what out because kind productivity think are to that

the a get we well, productivity probably we're new beyond big and see So the and as forward going we next, at opportunities better bringing that years probably, XX chemistry. the process today, for plants up better

It's like production something still in in been that's at, and with leaching but And but to techniques looking be or around agents the technologies new autoclave pressure next time, with still we're early it's year some going not that quite for early operated technology. two. that different scale, technology. it's something an It's is scale then at different

Operator

David from line Deckelbaum TD the from Cowen. of is next Your

David Deckelbaum

in assets building together puts wanted the just to more theory to you're That conversion allocating restructuring more in you're the future. capital JV Resources the the on ask, I out obviously burden MARBL Mineral post trajectory that any thinking presumably way year, over as growth at couple Does the years? investments CapEx how the sheet you your balance some next and point of in of about year. the change manage you're next this that and

Jerry Masters

opportunities. spending I it's -- mean change doesn't go be but balanced we're we it we as make that don't But capital disciplined -- more don't carefully look, as we I a forward, we give up but anticipated. had not and to mean, doesn't need I -- Yes. watch it it is balance we we're it But we little do have originally sheet dramatically, to sure than -- invest.

are you we've those for So and and us the those just looking the and opportunities see resources in closed. ones public that investing

we're the to getting long So this. and well. to We're market -- be it's near sheet. opportunities that trying want to about disciplined very then are we're come the a of balance as combination serious that. resources very we We term they for watch investing term But up. as about our And miss don't

Scott Tozier

the David, add. out the for competitive I this there look set, is but That downs handle opportunities talked I'd gives the across then at advantage of just you competitive mean, gives Like flexibility the us -- sheet if us big competitors. and And the is there huge that the about. many Albemarle. our just to -- that market, Kent a a balance not ups just in

David Deckelbaum

there bit in Maybe Scott. give a half a the expected just of first a the on tolled more where magnitude have quarter is, It you in based at versus been beginning the was you tolling withholding just of And volumes granular sense year volumes Can of on time? the the the little tolling conditions market year? volumes. point, back I might of suppose,

Eric Norris

speaking. Yes. Eric This is

we qualify largely because in year. this That we find volumes lag that -- twice did a it be last half what grow will our and it while So second that. of into is a for for and the tolling to partners it right so and there's pushes takes about the reasons. as the year, that's One, and year tollers overall X volume,

spodumene well second in year. As back-end is availability loaded as also the

not aggressively were you you're the the referenced of January, right, because market. where we volumes after market a phenomenon. And going incremental state in then a We in -- of February weak quite were market finally,

the growth all We've back-end I We we product over China, market also XX% in supply in sales. strong. because there regions. the but and EV for sit today, it comes the it referenced loaded it as seen earlier we will both be available As demand in And comment, have place. the to because in pertains as tolling strong here growth relationships is in is see around quite this demand --

Jerry Masters

conversion Yes. techniques And we're I around that. some on, assets there's We're resources, bringing and mean ramping up. large and those a balance with building expanding different here mines between -- those

a can leverage that balance to So effectively. is that, we've tolling we some and able way of that been

Eric Norris

add earlier also the opposed question coming to might as another that -- your can asked to capacity I that individual that the conversion deal, some volume MinRes as the Yes. toll that's on of well. around we self-produce additional now

while we if you tolling long And so in are -- look at conversion. probably can more self-produced. do conversion the Adding next term versus in we and months, near still means XX less resource bring

self-produce, But then amount that really to of volume more that's year-over-year. There's as going of the in growth. the always talked vary business. growth assets, allows market. and to strategy do. and will XX% other build so a look probably we It growing inside And meet in to certainly our at XX% we to any a have our is footprint It's part the of to China about, demand why that at how we we large end to it range we be us higher both to outside capacity we and tolling ability, and on continue than bring producers our some are have

Operator

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

Matthew DeYoe

the way significant Kemerton. sitting on of we seems and But is does? imply it I that's seems assume like keeps your fed It that about building on maybe tonnage into books. going What a turns Or inventory some pretty get amount the cash think quarter-over-quarter should here? how to it to if like else going is here, to of

Scott Tozier

a so question. Yes, good it's

as being It's by in see driven mind in Tolling, But ramping so prices grow. talked that on talked is Eric thing keep spodumene to second our been an we going inventory balances things: cycle, about. as impact continue Volume, that we as inventory So that's are up capacity; balance. our really X to about, the we've

actually it's look at very consistent. basis, you so inventory, days days a it of If on

those volumetric growth driven and just ultimately. really the it's pricing So by impacts

not line it's we not over to So where expect We're be. over-indexed in kind right on really of -- under, not inventory. we're with would

Matthew DeYoe

MARBL between I on do assets earnings or around China you relationships Okay. and that partner the and at call mean, And Australia, for sense conversion to some your think comments where makes trade not. it made they're wrong? a have trade with has think feedstock it in sense to look your as conversion make country you over And of maybe relationships about I to time the to Australia secure guess does network? that sustainability hard China rock better questions

Jerry Masters

plan to the but customers our there all West, Yes, not different geopolitical said our and what we Australia a and on we there Resources but significant and serve both. we about in part. significant business I'm the public been got -- pivot to company, footprint Chinese and an what West U.S. for Australian Mineral They're localize can the market and the the the been business for -- a lithium sure risk China. exactly operate most we're so West invest also chain And so in then of has their between we've views pivot is have call, company, we very we've -- supply China, the we've

the I a to for in to from understand location where -- resource find standpoint, We'd a Australia more, end geopolitical risk can It's a where of continue our find standpoint. up where from so from we end is going diversify to manage up that, and aspects and you then tight a operate -- look we'll we economy. tailings. geopolitical mining mining. won't There's it. good mining just is minimal, you They mean is -- resource but be good it's is that. the love you understand it's lithium base geographically And shying resource that to district. stable and away a They having it's

Eric Norris

clarify Western And Mountain, that resource Australia. our in base Kent, certainly Peak. now Silver just North is America just with Kings to reiterate, Australia,

Patriot then in We America, this South and obviously. Chile, investment have now largely

those focus cost -- being resources first of So position areas continue sort on resources. the quartile to the would with and low-cost we jurisdiction that be our as favorable

for growing market it's is and and to China in is -- do a -- -- certainly that's we great West. move what conversion, China as we and large a the a one in So demand it's

Jerry Masters

I Yes. And continue most build that resource is that. diverse -- industry, we the think that's and to would the like within to network

Operator

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

Arun Viswanathan

Great.

Just Obviously, had on to when more last year, cash move and balance and a you lithium of definitely you bit the Scott, experienced And view. we've question, the flow was a and competitive the of volatility price kind the contracts point But of obviously, I those guidance of construct index-based some a sheet positive guess, on front. on also reiterated statement benefits advantages. just quite pricing.

it's know to Albemarle the operating that point, of more necessarily environment. prices bit little at this the a not price easy model spot now part forecast I there, but lithium is So

I ton again providing you How to at guidance think mean, of per point? we've point? required I do that this that kind this you construct at experienced? guidance you statement? to an would Would concern guidance level. the And do lower $XX,XXX down feel that So be now guess, accurate So my your volatility go $XX,XXX to philosophically just about with about prices how be is that about back

Jerry Masters

Right.

contract based. the a to One, I with pivoted market So that of be so so have there's index to to things have mean referenced we're we couple more move still going we a typically index, I long-term mean, in there. market. they're

guidance the methodology prices, balance use it And the that for near forecast term. to going but whatever that market foreseeable we're today the our the we And the by is that's lithium move, and the -- the so with of do basically for year. take future, to forecasting decided we not by

we guide of in goal -- your that prudent that feel Ultimately, that, and forecast We to we feels the kind that's we able based adjust and like how so today, to not give forecast don't our it to can the Ultimately, to that. tried about of near where to lithium that's price, the in we tools market, view in confident but moment. on we get term. you good we and feel do to that is confident would at feel be

Scott Tozier

allows The other to it operations, given low-cost is earn thing low-cost throughout just to resources, the our our us cycle. remember

goes. the where throughout So matter we're price cycle, to no have going reasonable margins that

more take confidence well. guidance us able in gives that think I so this being approach And as to

Arun Viswanathan

moves are the Patriot. should into there? Great. There point? any other level you do feel in else the you're still thinking obviously partnerships? that approached And about there M&A the resource at larger And on made expect contemplating? about just you've backwards How What some was side. investments this Continued that we integration or you investment

Jerry Masters

because fundamental And conversion we of think our guarantee I if and resource, that do strategy resource mean, the then -- way we the question to from and the actually the quality to all the that's integrating of about we can resource be into we the customers. the to and conversion. the production the quality integrated proved I do

So as of be expect lithium we and the requirements edge become on to leading sophisticated, the products more more become sophisticated that.

So fundamental strategy. that's to our

are see we some do that from you And on of it said, We're activity the working the I that. identifying And standpoint, resources. time as to of I and end to But we the takes that now. mean the develop owning bringing resource from that I pretty a resources, think mean, there, until we to that's see we and mean, good us be given we'll decade. continue -- -- out and you us need additional

Operator

Kevin the Vertical Your McCarthy question from from is of Research line next Partners.

Kevin McCarthy

would change two In X% you of same partially? if on Meishan then version greater on that second wondering I restructuring on than to the it, lack of more you acceleration does that venture? the and of that question curve conversion experience And you capability on how have indicated in or where margins case? A press the MARBL, past? you project, XX ago, comment may. words, referenced drag Is the you term, capacity Slide completely now go in part an on the was as release Scott, joint other why bring better a might away for an case quickly related also to X weeks that's of the execute the

Jerry Masters

You capital. do the cover margin. I'll

Scott Tozier

Yes, on I'll margins. MARBL the take the question and impact

MinRes. period agreed we've for part to volumes So behalf of time joint a toll restructuring as the of the that Wodgina continue venture, on mine of of of out to

Once And by up margin ultimately. X be the will goes middle rate improve the points. is that margin believe over, that a headwind. end rate time, I We'll continue so improving will dollars year, it change to of for EBITDA dollars the our we'll certainly of but we'll same, margin that percentage period have period the through because next the

Jerry Masters

there execution. is it. in we just that of learning these there's had availability have the is we have of is early, Part execute better. we large the project old-fashioned Meishan Australia, that capability things. don't a at We're significantly that Part better We our is then And it's so on also time a It the is good in piece, there in biggest we China. projects. didn't then -- in the being significant that X labor do look, have project. it We're labor getting of number bigger there's about Australia. a to issues China capability the it the getting capability And of pieces is every

Kevin McCarthy

follow-up, different speed capital if brief you would a terms experience what as may. And to see. Kemerton at of execution? and is that III/IV cost or of How I Meishan in for I similar envision

Jerry Masters

Well, I but materially world years we on, than capability. projects was I just X or think and working significant around -- a think we're think on -- execute on III/IV, not all It's we're the that building we're X say ago, budget now different let's we and the it well, projects mean, can I getting schedule.

executing. budgets on said, will you're different depending That and schedules those those be where

different America Western So Europe is and than is Australia, North be will China different. different

built I in works. think But we're in and we Meishan. or around numbers a complete schedules Australia use can't numbers at there world getting or executed and is it and we we're not We've capability executing. America yet, That's it's particular. capital class like be project, take those and It's We're how great Europe. apply this -- Western in the still capital a world. but you good We feel Meishan industry, going the Meishan very them North apply So wouldn't project. to not

Operator

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

Michael Sison

I so think volume Energy Storage. about still If calibrate I away, I give if on When curious for growth could from sort Just -- variable us far volume with do growth you keep pricing you about sort these XXXX, just year? XX%. next at but up go should is think EBITDA or Energy be do next you of XX%, levels? how which EBITDA year, think how I for be we Meaning, 'XX as does about And a sort where of of then change Storage? understand

Scott Tozier

Yes, guidance, volume a little giving certainly, year. to be given Mike, next It's that way we're story it's that's the far a going out.

a is anticipating contract that and to be pricing structures. course, question mark based in all we structures. contract any would Of have, going on to not have the it's We're big the changes

to that as indices see expect those X-month of kind pricing moves, to So are. trailing we'd what lag that

part I well, story the our costs. will help think scale as important fixed that on an becomes of so

a Eric, our The of something... improve margins about with we ultimately. role based play have So you'll that's on Kent that productivity. our Albemarle all you Way seeing what into see operating of businesses, the results, -- how a and to little Excellence of will bit talked there. improvement we're expect so translating in

Eric Norris

It be fairly there demand but we But continue in next will price to be just I'm know growth supply going the confidence matched, to to growth Kent significant those will what and market more We fairly price, two will we believe the don't indeed, know that going market, will ourselves tight quite it tight as exactly say, do be is we be this. well. to year as as market. said, well. right? have the There'll be do, pertains to a -- as

So we standpoint, how plays to be that determined. a out foresee, that much from price

Michael Sison

it. Got a follow-up. And just quick

capacity or up scale you add projects. through As you these 'XX

the cost, go to you of fixed get sort think as decade? mentioned, end Your I they we did down of the

Scott Tozier

basis up a on But basis, an down. fixed go per plants adding you're will absolute unit as costs basis. on cost ton, they'll will yes, Obviously, down. a go fixed unit Well, on go meaning

Operator

Your Isaacson line next the of question is Ben from from Scotiabank.

Benjamin Isaacson

the seasonality of could pullbacks terms of in wanted the some lead a EV then on weakness price. you we And lithium of thoughts I can And QX, Improvement? just Yield specifics that what to suggested sales, in that? in volume give of the a What some see bit get is as Just just lift? shape your of that? have to is timing kind seasonal on the since the or Salar the that typically follow-up,

Eric Norris

is guess the Ben, demand vehicles, indeed, this vehicles the Eric. is it's crescendo there the whether half the in first. is I a seasonality, in ICE or stronger So electric On than year, in second seasonally

and market the careful of really had part the timing a that with in as would some across in see the I about has we The be year. Demand particularly the market What did, first think as XXs in was XX% price gone weak down been through on. the and we know in XX% but say Europe, of was growth and strengthened However, inventory and year, New do of about the talked strong the year that's We with U.S. correction growth. to has China, January, China Europe. in had to price we has we still coming the up we the up weakness as over lot the growth that year. a only correction up happened the has remained not of the is hasn't that Year. and inventory But why strong percent I the other that look all macro and marketplace. middle headwinds XX%, a range demand China, part

are secular continued for EVs. see there China certainly talk Grid big these, lots still outside recently and about, can we growth by has So of but despite also headwinds of storage China. macro we growth incentives supported been in in China shift well a as that

was weak to strong we I'd that front, a I careful It bad had Pretty quarter. guess assume ended. So, say on the yes. it not actually. when demand first be

I it. question, next think to was your second you The Please question? what repeat Ben, -- was

Benjamin Isaacson

Salar Yield.

Jerry Masters

Yes. Yield. Salar

of we that, is that completion and reached the mechanical So commissioning process efficiency. we've -- we're so now an in

speak. work we register, So brine that products more lead of through it for system, so are every an -- one we pump. able time have gallon to sales the start has to those hitting But way its XX-month so before Salar that there's the recover that lithium -- to we to

and at concentrate we -- -- system get I'm the that you use what still pond we use still when the we there? don't I the So uplift, would to sure not that, estimate

Eric Norris

from able -- loading nameplate well, next over we shortcut, I to capacity to Yield mean the actually allow Yield there XX,XXX we're Salar to couple brine the in -- us once start it's closer is to it's is get X Negra, project -- a years is more the months. tonnes. The -- it's of to look, ponds, going La uplift, Salar at which And slightly

next so months, we'll X uplift. starting that within year, the So benefit start see to of

Operator

question coming David of Bank. last from our line from Deutsche will the And be Begleiter

David Begleiter

billion just Energy us the your to midpoint $X guidance now Can the of prior the increase. bridge on of roughly guidance $X.X Storage billion you current First, from for guidance?

Scott Tozier

right all the mean driven Yes, I sitting David. extra but indices recovered they've where just It's all Obviously, really it's got a volume, the off now. by they're the price. we bit little of our price prepared remarks, of guidance happened June. of we've that mentioned we've as April -- lows them in improved, on held and we've in the flat have -- in end and as the

David Begleiter

in your are Interest assets What down to region? current in that your production Arkansas as accessing thoughts lithium potentially.

Jerry Masters

Yes.

to I that. exploit we -- mean plans So we have

in Smackover and Magnolia. access lithium have the to we the So

we basically, today, So we based process of -- which answer we that we an kind is easy for that It have on. lithium. DLE been everything absorption requires technology, would for bromine working pump different based,

new got to positioned take technology, sure to but the We've infrastructure well make and around right, have plants be able plan and brines. pilot technology It have access doing Magnolia. pilot projects a to to at that. plant. we is execute -- we and building want We're we'll to We're do we going moment, proprietary around advantage that. -- of we're that, We the we it run we're at but the that

Operator

now That's pass remarks. will time for to closing questions. all the Masters I it back have Kent for we

Jerry Masters

us Okay. Thank you, Aisha, all and for thank you joining today.

short-term disciplined our to long-term results. and We confident both opportunity strategy achieve market are in and

and are a global mobile, in are We minerals connected, healthy leader future. to that a sustainable critical

and continue We be both you the choice to for for choice partner us. the work future. joining for investment of customers present and the our of Thank to

Operator

Thank you today's concludes conference for participation. This call. your

now may disconnect. You

Albemarle (ALB) 3 Aug 232023 Q2 Earnings call transcript