ALB - Earnings call transcript Q2 2024

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Operator

Hello, and welcome to Albemarle's Q2 2024 Earnings Call. I will now hand it over to Meredith Bandy, Vice President of Investor Relations and Sustainability.

Meredith Bandy

Thank you, and welcome, everyone, to Albemarle's Second Quarter 2024 Earnings Conference Call.

Our earnings were released after the market yesterday, and you'll find the press release and earnings presentation posted to our website under the Investors section at albemarle.com. Also posted to our website is yesterday's additional press release announcing our initiation of a comprehensive review of our cost and operating structure, which we will also reference during our comments today.

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

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

turn the call I'll Kent. now And to over

Jerry Masters

Meredith. you, Thank

$X.X Albemarle quarter, operations, recorded continued to and operational adjusted strong in We of to thanks successful from second demonstrate net project and execution. EBITDA sales capital working delivery, the and improvements. billion part cash increases sequential productivity During and initiatives restructuring in

highlighting capture We spodumene energy driven and segment, successful sales volumetric in our that year-over-year, by project growth continue segment. ramps which to storage XX% was up

during example, our of schedule For commercial first quarter, achieved Meishan, the sales X ahead from by months. approximately original we

also restructuring align consistent than environment. second more $XXX quarter, the operations and in our our we with the cost structure million current During with improvements, market delivered efforts productivity and to

year track full exceed our this on are on by We front to target XX%.

the XXXX our to assuming considerations. full us our to we rest year position to contract discipline lower market We've year, competitive lithium of great maintain operational Looking our our performance. expect enhancing price and out made This our kilogram pricing productivity $XX is persists. and allows due even in financial that per Notably, scenario outlook progress July this apply and cost to higher flexibility. volumes, progress strengthening

and take that taking January, structure Albemarle's clear announced the with and goal year that competitive maintaining longer we the actions past position cost it we sector the operating long-term a of making that announced additional headwinds However, on driving began than last persisted our review value. are yesterday steps. Building industry we of comprehensive we must proactively this anticipated, have

our our adjust energy There but Australia. the underway. the site immediately decision is plans is at our and deeper spending on review, Kemerton global necessary we operating that to operating cost of initial actions and the transition announced focus part in showcase difficult question capital As no These discipline.

pace and maintain the well. Later competitiveness. call, highlight we spend our to to I cost it deeper the that remain into the proof I remain over hand we in changes must some of are However, the and results during now about as asset dynamic environment on time what take will also agile continue quarter. financial to and diving industry the that to Neal this competitive strategic our will operational And points the of advantages strengths. I'll Albemarle's actions talk

Neal Sheorey

the good a in X, pricing. Kent, and morning, year Beginning billion our In billion let's second XXXX, compared we driven $X.X by decline move to quarter everyone. $X.X recorded on XX%, of net Slide performance. of sales Thanks, to quarter, principally QX prior lower

Adjusted we a to This quarter, a related the asset million $X.XX IV. million, $XXX diluted for write-offs Albemarle included per attributable loss result to $XXX an charge EPS recorded primarily project share. of $X.XX. diluted of was per capital During after-tax loss Kemerton share of and

X. Slide to Moving

all from income driven quarter, the to across EBITDA of second businesses lithium earnings higher and than more reduced Our substantially offset increased quarter and volumes. ago down by volume prices $XXX second quarter EBITDA period first the growth XX%, to chain. as adjusted volumes the million equity favorable by higher Compared JV was sales versus Talison sales soft in lower year fundamentals adjusted was due value rose

at JV, offtake saw our a what EBITDA the from quarter's by in $XXX reminder, call, lift and partner on Talison the quarter. a we As expected last we said million sequential that approximately earnings we an higher-than-normal to that's

Slide to X. Turning

based on on of earnings here this lithium China you changed relevant our both considerations we quarters, prior and slide for price market shown As since a scenarios. pricing in The pricing we've including done historically carbonate China numbers XXXX prices, scenario have lithium blend call. see The last providing not observed market outlook hydroxide. are ex year represent full and

Kent is the What the July pricing call. at mentioned the year. per even expect new the price assuming top persists of is to $XX what be applicable now We the of kilogram scenario market for lower balance

higher of sales We enterprise-wide are due the strong volume to this energy continued our performance scenario maintain JV storage. improvements, and in Talison our contract volumes success able to at cost growth,

Slide Moving to X.

the our the billion We revolver. billion, continue of billion with ended available environment. under and $X.X navigate equivalents dynamic available liquidity prioritize to liquidity We to of cash strong cash our quarter market and $X.X $X.X second financial flexibility and including

net debt X.Xx the maximum was was quarter's Xx. below adjusted which well of Our EBITDA covenant to

XXXX. to we debt perspective, due add well as continue such resources and liquidity long-term We are factoring and AR program, late from new our have no maturities a significant until positioned

performance Slide operating considerations. flow X, to shows and our improved which cash Turning

on efficiency focus drive benefits. and Our to cash continues generation important

Our conversion second primarily in was to Talison unusually which was increased due operating high, quarter cash dividends. flow the XX%,

continue volume all contributed of working and our which to cost drive efficiencies, to also growth, cash conversion. capital We and productivity improvements

As expect is year conversion higher of range. the we our look to cash we which be now at our approximately historical full operating forward, end XX%,

hand now to Kent. back it I'll

Jerry Masters

Thanks, Neal.

XX. to Turning Slide

build maintain actions the we productive about and our streamline announced position have cost already competitive to cycle. Albemarle's the operations, we the across out underway actions details on more yesterday For and

fundamentals our on cover I'll first XX, Now in the market. Slide

are XX% June, up China. On by side, in registrations led through the year-to-date strong growth EV more demand than

substantially we versus seeing expectations. shifts. U.S. mix However, industry's value meaningful are the pace of has Europe chain, the growth Across the the in moderated and

hybrid in less with has per sales, growth smaller plug-in lithium batteries translated vehicle. stronger which to First,

at see continuation on occurring the of are in trend these chain highlight supply positive conditions the the demand, and of shifting lithium we however, as carbonate-based time more the it side. are see same develops value long-term we demand nature second, a Both overall for And batteries. towards These this still as developments matures. changes they dynamic

significant as to come see mine the to level yet market. have and at changes supplies existing new continue We to

idling At oversupply believe conversion the Chinese on at nonintegrated there are operating pricing, reduced and into many And are incentive are market for current required spot production. greenfield projects. cathode China. some the are or hearing side, is we from in And or lithium current with that producers who rates unprofitable pricing hearing the producers predominantly still pressure. integrated is batteries even below we're Moreover, under that pricing well Western

chain developments consumer benefit play. uncertainties eligibility our are the like position, Notably, U.S. written Australian of At our to concern and the and producers yet are to we rule And also others could This escalating impact time, the of business. entity Energy armed Albemarle. supply that specific foreign upstream will credit geopolitical trade FEOC has well. ongoing adding to our Western final as includes Department also the conflicts. dynamics at suspect product, be Challenging XXD of tax IRA's tensions impacted or as same

energy $XXX well on long-term Slide can add potential per current and is chain While kilowatt challenging end growth of achieve dynamics The is the that markets strong, our uncertainties, transition EV supply there parity the on all track to critical likely anticipate see to question from these global remains you no that hour XX. we XXXX. underway, growth the is with tipping world point has combustion with into lithium continue surpassed internal target rest XXXX The Chinese behind. changes consideration, are the cost the X.Xx not industry EVs at Taking engine demand vehicles. to of where far as

needs. global over see to lithium we time, developments significantly Additionally, technology size long-term translate growing factors all EV higher by and battery driven adoption. These

and Turning cash XX. reduce optimize actions to Slide In flow. proactive growth, we a announced cost series January, of to preserve

of Our out and ramping and Salar are and at schedule, productivity actions many have financial tracking we targets, CapEx now in-flight executed ahead on successfully XXXX by cost and conversion. and those between actions, including flexibility generation ahead the enhancing cash of and reducing or teams million our delivering million to of improving estimated XX% including our Qinzhou, projects deliver $XXX Meishan year-over-year, $XXX initial

well, that and our leading yesterday to were the and of we we us pushing ensure cost our more steps deeper the January, embarking announced I into require to review dynamics Building competitiveness on comprehensive described on pace operating structure, actions position. playbook the just maintain served us pivot these further While in announced cycle. across do industry we to a our have our to

on preserve our taken actions the middle to areas that conversion bottom you cost forward resource the reduce next improving and we provide structure with slide And quarter closely to and the begun, We we'll show capital world-class of X of future that our Slide of process. in X focus we comprehensive of earnings. are enhancing across key just capital on already focused see cost we've The network review details global That our as Albemarle's Albemarle's additional competitiveness the expenditures plan as areas. our details took part financial bring of intensity set slide opportunities which and has our is XX. optimizing to and continuing additional third this the decision flexibility. The we evaluate advantages, said, but to slide: first operating the step the network efficiency, difficult section further the these the and on Australian optimize to review, necessary highlights

proceed review, changes one our to Train in with previously announced the follow yesterday lithium These of As construction Kemerton we hydroxide our this announced to comprehensive footprint. not first X. steps adjustments Australian immediate the of decision

X and unit will place we production maintenance. Specifically, Train in the at Kemerton and idle care

stop we construction will activity on X. Additionally, Train

These focus on weeks, identifying million to on over across XX estimate optionality preserve on conversion at a months. and will and focus the options. be save Train $XXX with other capital optimizing changes stopping geography. to In million ramping network X to we Notably, the least highest global that us our return Kemerton coming product highest optimize ways allow both to the and Train diversity and X type priority spending next of construction $XXX we'll

to to assets portfolio our provide customers their network global maximize of evolve. provide the our to meet of the Our needs high-quality extensive and hydroxide technologies of and value as carbonate flexibility demands our the tolling resources or convergent either and

XX. Turning to Slide

of continuous As remains our we best executing culture operating the every standard operating to of our by improvement the we in deliver of are Way Excellence practices point identify the next these operate. model, cycle. begin initial By savings phase which review, and at the Albemarle building we our a model,

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spending and capital profile. Moving XX our to Slide

CapEx mentioned million $XXX I expect to below earlier, to we XXXX million As $XXX levels. XXXX be

our reduce free Albemarle capital and further Moving total cash to and long spending. are flow intensity forward, competitive we enhanced position provide will stronger a improve capital optionality, evaluating opportunities This term. put in

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so advantages review with we I our will prioritize continue to framework long-term core end a the and our of And of value drivers creation. as

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cost our key process is sustainably. leading and further and productivity improvements, Second, chemistry to know-how achieving safely

industry. and order this Salar to improving sustainable while proprietary and be sustainability. both XX% proprietary to lithium Magnolia, For increase utilizes prepared we direct have to and improvement we've that third-party the be more up a are shifts process lowering important yield of project example, wide At extraction options to leveraged advanced and the range options costs higher technology technology evaluated at Salar solutions And a for for Salar controls yield. piloting enable production in and Magnolia, could

Third, lithium. innovative high-impact solutions in and bromine a have pipeline both of we

research, Langenenslingen, to in facilities Louisiana allow Our differentiated specific testing participate in customers' North piloting support Germany, Carolina, our requirements. and segments and and us high-margin

Albemarle's not high relative Net increasingly major successful as high-performance number of growing least, organizations. companies. of a with leading pioneering Scores with but by reflecting gaps responsible demonstrated and industry have are partnerships Both through stewardship, our last strong our businesses long-standing recognized position Promoter Fourth, our significantly with choice values relationships leading customers. And culture iconic is positive to competitors, partner

in our global creating in gold more part Slide commitment improvements, our quarterly Despite ramps a XX, thanks cost and outlook of year operations. For project advancing maintain storage the medal us and world EBITDA of resilient performance full been strong including enterprise-wide the recently X% example, and to another performance. second customers. In cash pricing, earned and top demonstrating adjusted we sustainability in objectives companies delivered market an summary, EcoVadis placing from we've able on XXXX in lower quarter, improvements our sequential the contract to strong to energy Albemarle considerations,

However, we given be headwinds. sufficient understand not these positive may actions industry ongoing

is we and control to on markets. the opportunities what competitive excellence steps the we organization the to long-term That's on cycle. while are delivering capitalize in are Our focused control we the across taking our operational entire proactive company ensure positioning incredible why can

is Albemarle global integration a portfolio strength. with world-class leader a and vertical

execute taking events future. today and position to here positioned to the am I Slide look actions I to our with we face-to-face maintain win. of agility We the seeing and forward listed confident are right are competitive XX. uniquely ensure you in we some upcoming at on

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

Operator

[Operator from Aleksey Yefremov. Our question first comes Instructions]

Unknown Analyst

your maintaining per Ryan question of location to if a for say, costs. Aleksey. you're mean, year, is though let's potential EBITDA are, prices kind the right? currently to This or improve outlook So case just base scenario first guys the I prices understand of lot scenario, were $XX could I kind would even per back kilogram EBITDA on you My around here the be $XX kilogram. the the that for in the per improved to $XX half? recover talked about in Is that $XX there that kilo

think wondering that? just what So you about

Jerry Masters

So let's say said. what characterize we've you

make that those So we we've that prices, forecast. the commented moved say, $XX that $XX. July even year, rest at to as the even of for from we'll then hold And $XX to,

like or terms, be the And of are that it forecast we're so contract to prices that. number reasons things around moved could hold is there's we're volumes a there higher. up chance If selling that able a

so if it collared, prices speak. stronger, to it's So up are move could not

could that. that's our But the visibility at It best could have number things be be different direction, we than a of if the moment. in higher things. So it work

Unknown Analyst

actions know Okay. Helpful. initial it's just kind maybe been and these 'XX, early, that just And on then of have Kemerton at 'XX but taken growth for now. just I expectations volume after

Jerry Masters

Yes.

the have the we year, changing you're capacity, than But shouldn't should out So taking early. we beginning that. some different but okay, growth that. volume think that significantly I still the of mean our indicated right, align in we conversion what -- our it's we're of to and resource our be are volume I

had last significantly than indicated not the we it's So call. at different

Operator

question Our comes next from Steve Byrne.

Steve Byrne

some where more margin the than cost the And Kemerton freight meaningful your costs Chinese has curve? put Kemerton is cash for on roughly conversion. what would of it What quartile? some X? But you

Jerry Masters

Yes.

we've So I assets guess cost given out never put and of any that our type there.

so is you're talking X. -- it So of -- a guess it's combination I about

money a the really things. we're is X of And us I spending gives some and about of II Kemerton growing and couple So that that.

it just closer it's -- diversity. us geographic resource, to diversity So the but gives

have have and us Chile, with would we -- X would help we that. we So X have Australia,

aspire We we at have have if still China. to come some the U.S. to And back point that. then conversion prices in

you that's So cash thinking marginal I'm the that give is or what some our decisions at going the is cost not our made. cost but we've to Kemerton, goes into of

Steve Byrne

seems It It's the there's respect sure. ahead, to But a $X supply like with Go a billion cut. more roughly cost cut. just than Okay. -- Kent.

Jerry Masters

No, cut that It conversion. say on The conversion. is still I just was it to on is resource available. capacity is going

Steve Byrne

Right. XQ, of buckets? And that charge is can Understood. you how $X much The billion cash? put it in into

Neal Sheorey

is this Steve, Neal. Yes.

let of kind answer part go your the of and maybe the So together. X me question second

people working at this had roughly on a very group time, speaking, So only this. we've small of

think at terms we that when actually get say third represents that you our at is XX% expect off. of roughly So of of on today, that is the to we'll that obviously better sheet XX% a can least then quite similarly, third And $X bit noncash. we're of quarter. on of kind that much announced refine is how But billion number this somewhere balance in writing And that should what's But order we noncash. in cash. quarter assessment you about of the rest charge a least already give I'd we'll you

Operator

Our next question Cunningham. comes from Patrick

Patrick Cunningham

cash the be to of year. any square below expectations had to trying some the just of time, the strength $XXX tax capital in projects? drag expected some last Was in deferral headwinds. for to those of items, improvement well other million ramp versus whether remainder cash million discrete things the it's just averages there Maybe the $XXX trying in to working outlook I'm here, conversion for comments historical of or you the items understand

Neal Sheorey

Yes. Yes. again. is This Neal,

asking thanks we that that So that which for to say I expected. better towards we're now in XX% -- we're range yes, of because considerations there's things than conversion, prepared that to X is remarks, taking the range where in our as our now. are said question end we the point up -- historical And would I'd there's high doing a

from from that is our expected coming first The a year. we certainly dividend was companies, the than into better equity perspective

at You Talison. heard additional we that the remarks prepared know in you saw about our and offtake

So initiatives working focused first the part boosted and the in back other And through come and and half half of definitely dividends yes, on the conversion. the quarter year. those that our we the to already of in capital lot in on it, have then work and we're we second of seeing side, are continuing that highly is, a some this, around helped the cash the are on of year

was nice terms cash another working release So cash from of to there. the tailwind capital in of

Patrick Cunningham

sequentially volumes on onetime will stand if is be else? numbers your around we you some benefit the for Can remaining how Or of us XQ for kind of sensitivity there on Very this energy mostly much that volume? in is here? then we should sequentially lower And based averages then about July think how hold helpful. where something pricing storage. help just generally And should Understood. triangulate we

Neal Sheorey

Yes.

part that. I maybe So the second of take can

have, end the perspective, We point keep that tracking volume to higher this XX% that of from we're beginning of of high are going the you range. think I obviously for tracking a towards obviously, to we're XX% at probably gave the the And end at growth year. towards the visibility range volume we the we

se. given I It's really So you, to $XX our outlook pricing corridor that considerations kind or range by $XX really earnings volume around our today. that the of range we've per wouldn't driven say are

Jerry Masters

Yes.

but first but the from be strong end -- spodumene that's in less was was of growth year-on-year of that part because some But That's it's range, in going -- just is pulled that mix Just we've forward. it's of and strong the upper that volume XX%, to first and there year of had half, that as second the half. Neal the saying like a a sales standpoint so well. in

Operator

next Andrews. comes from Our question Vincent

Vincent Andrews

priorities had rating. to revisit. it. I quarter, a couple it a One in a to Last allocation things commitment slide just had capital you and of would investment-grade on like was

the about X.Xx. to How your to was thirdly, comprehensive debt ultimate dividend. the less than support of the second are things long-term adjusted EBITDA those review? The target of part and net then X as And continuation you grow thinking

Jerry Masters

So will -- Yes. we as I it but I our right? will don't that, view mean, think I has suspect that changed, through reiterate stay we'll the this, go same.

Vincent Andrews

and a we'll as guess, the about factoring that it, capital works you the I for little how you how bit and working speak could follow-up, see a results. process in And

Neal Sheorey

Yes.

we Vincent, to that an that we untapped. It's an as your put as initial evaluate question, AR factoring So program add factoring go essentially, continue We in to We'll along. program. it right. to But currently can program. is and place that's

when it liquidity. if use when we and we will We need liquidity need

us. at so an and to But point, talk And resource about basically, that's you'll see it. untapped it, it's available point, we'll when that this at

Operator

Chris comes Our from question next Parkinson.

Harris Fein

Fein This is Harris for Chris. on

shipments per through would And at the a be say, So let's that through down component? $XX we that that Talison if cost scenario because kilo higher how And I like where of of much go improvements? is half prices of per still kind absent contracts what like back the of isolating trying those looks guess just walked and sense get to holds kilo the I the EBITDA just were year? items we $XX guess, if to, of $XX.

Jerry Masters

Yes.

-- So $XX it slide, balance to remarks the pricing, holds. pricing the July that right? we've same, extends So July the said the basically but it pricing $XX holds still of the throughout July it we've holds year, that, on in said at

And So what number you there pieces that do a of to. number are can us to work that comes out allow exactly that.

the of we're from It's the our bit mix, little contracts. lot it a Talison, savings additional in cost volume it's is that place. putting it's things things. So volume It's a of

So it's into things that a number of that making go statement true.

it's thing. one not So particular

Neal Sheorey

Maybe average on Yes. that, a a outlook provided that were pricing to the considerations the year. view add just reiteration across on just to always those we

And so sold. with the last couple of earnings given had releases, we've we've given that you you -- the we've you in volumes obviously and know the we've sales storage, energy that

So average realized half the the at you It's of been price year. can look our what for above has been. $XX first

-- the we've And you. and why do you roll your that averaging. when you so year to that like back and in within whatever price take half say But you range take given of when you'd lithium July the pricing -- can it forward, that's the we falls it

we've saw. before. that I sequential the Talison, answer what the way told Talison the to exactly go we to to in million second you we said is the lift related to best expected offtake, and quarter, that's additional about $XXX what just With regards We back to think Talison offtake, that

part gives you of an that think your that how of maybe So question. about to idea

Harris Fein

Western make EV are you kind outlook? also year you a question, X. or the average for nice Slide recent that track with show of for it. some that hear and your Chinese what my would That's in XX, that is your how challenges on EV European OEMs having the the into be ICE in profitable Got It And is global then of playing on next take cross to from in the second demand EVs, helpful. parity fallout of tariffs on maybe making

Jerry Masters

Okay.

So see below -- been the mean, that's in been per -- at people that call hour curve mean the has and a cost said -- That looking I that that you looking XX. we've curve industry tipping the point, a on that cost that I has for for, have China been on you -- or $XXX today. kilowatt we're it time. been benchmark a some we Slide

fair is Now the -- and enough is curve, it some lithium on just battery the that of are the technology but majority experience prices low, technology. of the on

So I and it comment hurdle. that itself. don't the to rest -- we not And position. but think they've I the It's comes in world the hit maintains on that West yet, of shortly. want China the OEMs' follow I'm that will think we cost then there not believe

lot auto think goes big get the rest positions. to of technology not and the hitting time, cost But a it, the better. into -- going but long including we've But it's well. a I for think on not into of it is we're it, as part vehicle that. comment looking I'm Batteries the battery for, it's going to I a is benchmarks get those been only of

Operator

Our next question comes from David Begleiter.

David Begleiter

for Wodgina anything? Kent, what curtailments production, does the mean if capacity Kemerton

Jerry Masters

it Wodgina think anything for production. don't means I

said, in had out taking conversion the we resource so as piece. -- there capacity that we're So

both standpoint. Greenbushes related operate the to Kemerton. really It's continue Wodgina We not and from to

David Begleiter

And of last that think just shut what's should is you [indiscernible] in number China, on happening how how here? the months all changed good. at is in Very couple much And down?

Eric Norris

gone. in hasn't say cost changed tons materially. off months, where are to or to in guess bit. would has I that's come of the is it some price I'm couple There's of Eric. tens the -- less going is where this David, last thousands that we of a related

And in they're Kent a of are under. fact, -- loss, spodumene the particularly integrated talked if or considerable in anybody at China. in petalite operating remarks that I fully is most think either buying who anybody integrated about inside not is his is not pressure

And so that's a factor.

to of ramp is brine up starts in Another thing that year China. happens seasonal Western time this production of

substitute drop petalite. in And so that sort that's rising to of

of inventories rising seeing we're though, overall, think I salt. lithium

watch. So talked obviously, about. that I And pressures is a the concern to price

where demand So think how for the see some we have to a versus caution the need in market Obviously, there's we'll given supply. I responds. see industry --

Operator

Richardson. from Our Stephen question comes next

Stephen Richardson

bit that wondering suggesting sustaining but Kent, like previously was lowering year? put you review And the lower I are little that's more about sub-$X feasible little and Do minimum you're of there's on a a slide below sustaining capital envision a number? it range a capital. your from ongoing, It corporate billion. I current you XXXX? that if CapEx appreciating an than defining environment efforts billion is seems -- Is was wondering that guess that the capital on XX sustained prices that in I where your was and $X that could bit here is next forward talk required you into

Jerry Masters

Yes.

operating, that. as So of not growing capital, what of -- that, this, view we're see fast. around we're and on some but might we're look, we we're they're It's than of it. assets have to we We're mean a It around piece. lot that rigorous cautious But ramping about are ramping be a going that. be these but to through sustaining pretty new. right, big -- we're We'll aggressive going we Most can challenging others. risk, more as going a to are I are be assets, push and we these we'll take -- still

around capital. on So been we've our estimates the sustaining conservative

So opportunity. that little we see approach that our an change and a we're dig but into going bit, to as

Stephen Richardson

still and of the absolute just about that the in safe 'XX just do on still growth this as year, it this did into CapEx kind is different flight guess in reduce Would you'd would Appreciate the a projects what based lot on of out indeed -- be remaining of in on there are you terms in And your ramps? hazard a that growth just still follow-up, you're growing are and Salar assets 'XX willing be be that kind just growth? thinking to of have of you you'd if of that to -- appreciate assume maybe those program outperforming anybody that. growth Okay. if in you -- to think volumes plan terms ramping

Jerry Masters

right. No, go Yes. And I think to said we've back the that's I comments earlier.

So We've ground what we said the that changes years of the we of the in the the previous call had around or ramping. did quarter's we got in in couple growth and have call, a assets previously in January. on

on starts So -- it without we at and into but to that. we'll 'XX that then start to continue further to do maximize investment, 'XX,

us it's but resource making. up. us a the gives again, diverse to doesn't mix, less really trade-off Kemerton that's and flexibility little And that we're is the Kemerton more, that product more ramp in geographically continue little bit that. the the there conversion there -- but limits -- changing around we on investments actually we've and But a change we're it And capacity, made

Operator

Laurence Next question from comes Alexander.

Laurence Alexander

Two questions.

X long think it first years, margins where one. First can to the can would so but range, over how you sense, you Or I at how So prices you restructuring, for to next do that's example, structure? for energy down you mean just to expect you much took go of the not give however X, about the a longer-term you rightsize? kind the objective. current round the were X, storage just about much think if, stay bring of cost

you for how about market the longer-term think improve? Just objectives not the business conditions did if

to need support America. And do What see projects spotlight secondly, bit a the of to move for current a can forward or anything Latin of DLE you terms in government partnerships of conditions. sort of you in in for on comments just give either state play

Jerry Masters

Okay.

So restructuring. on the the first one

stays cost the the is today, it that goal see if compete we and put to our within and the supply pricing that term. long structure we the company chain that can way So at

don't So but just -- a hypothetical we don't rebound. what come that's know up. below to when they think We players know operating think lot planning And we're they are that's question of going cost. know We asking, for. are to cash We when. have we the you're prices

the to range. profitable we're and be to in and So structure that company going competitive operate

what margin hazard not position put ourselves to to to profitable like? in be margin what compete the where going is today. prices going it guess to on -- So able and that, being I'm a a -- we're but are that Yes. looks

first that's So the question.

And We've said our the DLE done second the on projects, Arkansas And X I of the we quite at we at got we the One States and -- around process the where pilot Smackover process have work that formation take a focused phase. we that I on both one, America, -- industry. and are our on of so time. DLE, know We've that. have DLE. talk about going projects, not I'm can stream going much that in Magnolia I you don't some United lot in brines we're for to mean bromine. into -- we mean working view South and

start-up pilot is similar in we'll pilot de, that So a Atacama. at around then have And a at moment the Salar that. do the we

the said we've remarks, in proprietary. this is think I one the of technologies

other kind is The of commercial.

But There's So system, You the making key whatever extractor the just lithium operate actually focus extraction people we're -- ways. not whole I lab. the system a solvent a get absorption lot piece. and and in But technology doing of I lot on in, do it right? a day mean, think integration to art to the used it real lab, of it do in DLE it can the overall a in the a molecule is the and different couple and can the or the the out, consistently day out. is it of

all and You need time, be the to do doing do able -- out. that that scale in to we're prove will field it it that's pilots the and

And so we'll see.

what the it's and -- standpoint but world moving industry us resource Salar technology projects help think and for and we mean, to specifically, for those in would growth need necessarily. Atacama cost for we'll lowest DLE. And So that, funding forward. the de, important get us, do around don't leverage looking that, for from of for from I the really mean, government us, I I are we that? both a we're need government

don't help So -- I fund moving to us And waiting -- important. governments it it not do forward. like or we're or that is but anything on

Operator

from McCarthy. comes question next Our Kevin

Kevin McCarthy

an trend and trend prepared commented you batteries. the case on I or your remarks, you're you that bearing II? does that Kemerton idle that's not? have seeing discuss it whether for any your Can think intensifying is And ongoing Kent, why in to carbonate-based decision

Jerry Masters

Okay.

If shift -- West toward I carbonate. LFP usually the go a Eric a high jump been I and such in. portfolio China. that's technology, bit preferred for little a there's gets is growth little it this shift I'll say chemistry will there's is mean, would So But -- a of the of a Because technology it That's of deeper, is slowing carbonate bit. the at mix is mean, And a on down I in and preferred level. toward -- is a more -- rate China LFP.

at It looking hydroxide a carbonate heavy. or more LFP from Therefore, year is view West a the our mix. we a well. always was as Now or expected X ago, little

I play was Now that that talking more product to, it's flexibility. that. gives is we if about earlier Kemerton heavy mix we when mix, view. product And us and toll for probably does resource that that then hydroxide, into I Kemerton, same need carbonate that in mentioned can carbonate and

consideration in it our and III. a So around II decisions was

Kevin McCarthy

And that? make then a need restart to to would you there And a And you to cost decision II? might follow-up, quickly how to as to be meaningful what a is specifically Kemerton restart? see able do

Jerry Masters

Yes.

a there's right? maintenance, So back, be to come to dramatic. it ordinary a I it's cost that in be And It and not cost put don't would would it care but course. know

get focusing struggled asset, the do. in things number X to back. We've with it to Part decision ramp to of work. a X X it of we I not is There's brought together. that on think of and struggled Australia optimize have the really workforce to we if about we and Train them

on So operate, to we're understand up that technology and focus one, that to ramp really really make the going process.

the to we and more Train can faster And make we back when conditions that efficiently right. it bring think X

got it we'll X. plant bring before that. that chemistry to back. we frame the would market order to then And be need really Train would before few that's can in a time we to unique the -- It but understand to do And then we've improve will which do there be we to bring do process the and the Kemerton. that, technology a operate, things get So

not going a to have from well. bring dime, cost not on, back -- but not dramatic be And to people a bring we'd it's as but on do big to plan and capital that. back from that a for standpoint, we'll turn So would it's to on there it

Operator

comes next from Colin Our question Rusch.

Colin Rusch

kind through dynamics adjustments. of the pricing Historically, you've you're some talk sort of that enforced contracts, you and customers you enforcing of the making some with working these might be can As you reallocated about and compromises volumes. any

of want get those Just how out? sense are to dynamics a playing

Eric Norris

it's it's with discussion Colin, -- there to do the going. The have would to customers on continue the market all you through helping we'll It is period in this of expectation have that that certainly to out, Eric. at competitive while date you is so. our it's performing our behalf. same time, obvious we remain pricing time, tell where and are Yes. contracts continue order the that their and around point invest contracts I a respecting as these to of thresholds we

There working things keep we'll are do of And source. our we terms with customers. can in

around contracts their that bit spodumene these look fundamentals our different the flexibility, time, of respecting that same and points We with a core Some chains them of at can little supply while we supply the have supply. contracts. work salt of sourcing helps versus can at are

discussions the the to date. basically nature of that's So

Colin Rusch

And then just a the little bit on technology side. more

doping helping folks approaches the the of substantial. Can to out it's much challenge? I completely silicon-based talk center is a know whether pretty lithiation to you R&D increased and about we and see it's anodes, or challenge -- more of you're how levels As getting process leverage out bit the silicon, lithiation figure little

Eric Norris

Well, this silicon looking And that out, anode moving can an electrolyte some sort are that's focus or talk the a lithium even -- step towards advanced lithium-based next or remains And a is furthermore, anodes as solid well, lend life of a of the for growth. will you the metal we when journey materials or materials there area used silicone about range. [indiscernible]. with battery on whether that prelithiation themselves, journey longer state obviously, liquid is of to anodes that our at batteries as of for that doped higher-capacity adoption support point lithium

growth. a less in So adoption of electric battery these of customer outside and areas a faster in involved we vehicles, there's technologies whether perhaps smaller risk These see, areas format are the base. frankly, having

As one a first step, hand. the on

this in On doing hand, looking as a lot OEMs you of area well. are the some There's speak the they're of producers, investment to progressive other at if technologies. future more who vehicle

to of question, So customers. with low, partnership it's earlier and like we I we as relationship to support us got that part well, supply, when have a the with they supporting them throughout well prices have technology than maintaining because overall contract contract and as you're relationships reason things deal pointing respect strong the if we it's out. and relative parcel mean they're the that are the more cycle just

Operator

Our next David question comes Deckelbaum. from

David Deckelbaum

get wanted where $XXX understand, with you Can I of target just just Maybe you the $X million is still over expect it And CapEx, reasonable a about context you of for be? to million or the to billion remarks is move, in have year's months sustaining to $XXX what the multiyear that talk could I to more for a next think, that Kemerton progression? CapEx take saves or next XX so. Neal. to the sort next of year

Neal Sheorey

Yes.

I answer think probably that to going I'm Kent similar did. the this way very to

around Kemerton XXXX, and decision doing into obviously, that absolutely So that as focus in this we've out look on lowering always at sharing this CapEx in about into And XXXX our factor we our CapEx talked today environment. years. we're will those

we with question, an and And earlier current how bring lot teams through we what can without understand risk. working that right taking now. the that time can can possible where that to unnecessary environment quickly obviously, that that how we and down of spending hard bring down like our and CapEx as mentioned Kent a looks we're to we need looking as our at as Just we spend --

would couple just that working more in next quarters. on say have the share, I I think, So to and now, we're we'll like of equation

David Deckelbaum

and going growing my on I -- is CGP ramping now, appreciate forward then volumes X that. just there. at And Greenbushes with follow-up

into going all will you sell back be all the with profile through Kemerton On do to tolling having And commercial capacity you concentrate satisfy tolling? the able is Or contracts flexibility forward just reliant now less end be have market? on your to spot going customer spodumene of the to alone?

Jerry Masters

Well, not it's -- tolling. just not well,

So conversion we've today. of got assets a network

conversion. ahead and that we've is sales facilities got of operate we And in we said, other Meishan operating quarter. own as schedule, -- so speak. ramping up this Meishan China in we we And as we from multiple first and and And for have

of a assets. Kemerton So of our conversion hard portion is rock it

And blend. it will be a

portion We assets, on a to to we will X some again, it. the and use we'll bring after Kemerton have significant supplement is conversion And and assets X have of just but conversion operating IV III and that. our tolling

then it's the we Chile still we significant assets So to that and from a have, portfolio forget about well. of want don't we conversion that as carbonate bring

would I to a the portfolio network good with in that conversion Kemerton. this change And change not it's say pretty a big a So assets. of is like tweak, wholesale

Operator

Our last from question comes Roberts. John

John Ezekiel Roberts

here channels Is And some the like the and is on weakness the many actually portfolio. you're those had who would channel have, have the business performing end of already ask seeing weakness? question be weakness thought market that others of [ I'll -- good in the destocked reflective Kitchen a ] or specialties business. had destockings? temporary would in your the specialties

Netha Johnson

Yes, is John, Netha. this

the are we end growth weakness, expect but in our result We and we in in and market price price Chinese strength growth see And oil and maybe that as spot in are the growth quick gas, we look particularly than spot and financials if weakness. is seeing explains as rest QX and expected, that. But that continue, X%, some of rather And have than a recovery ton, seeing in pharma sequential as year of ag, we throughout maybe and but we was the of shoots come, $X.XX what metric that thought, continuing a pricing. per we slower the electronics to in green little electronics. was the are the We per as a price seeing our volume QX, have spot price, decline. only bromine which not recovery did market and you public at $X.XX ton metric

Operator

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

Jerry Masters

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

that to current company's better for Albemarle move growth shareholders. in long-term right and our growth we confident Thank remain long-term value in ourselves markets to adapt value continue opportunities the the for and you. I and secular our profitable organic Albemarle create end enhance forward position taking steps trajectory We to environment, the creation. market position are in

Operator

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

You may now disconnect.

Albemarle (ALB) 1 Aug 242024 Q2 Earnings call transcript