Sustainability, Energy Transition, ESG

The Errors in Albemarle’s Strategy – Seduced by a Smarter Customer
March 8, 2024
Companies Mentioned:
Albemarle, Oxy, ExxonMobil, Li-Cycle, BASF, LifeZone Metals, Origin Materials, Plug Power, Avangrid, Chevron
Commodities Mentioned:
Lithium, Styrene, Carbon, Copper, Nickel, Polymers, PET, Hydrogen, Ethanol
Subjects Covered:
Recycling, Renewables, Carbon Capture, Emissions, New Energy, Hydrogen, ESG Investing, Climate Litigation, Clean Fuels

C-MACC Weekly Sustainability and Energy Transition Report

The Errors in Albemarle’s Strategy – Seduced by a Smarter Customer

  • 1st Topic of the Week: Don’t Let The Off Takers Fool You Albemarle and others are likely chasing an inflated demand forecast, and are being encouraged by off takers whose primary goal is to ensure oversupply of materials to keep their products (batteries and EVs) inexpensive. This could keep lithium oversupplied and position on the cost curve will be critical.
  • 2nd Topic of the Week: Critical Mineral Prices – As critical mineral prices weaken, we suspect that initiatives to find alternative sources to China may stall, as the West will be focused on current returns rather than future needs – this will keep China in the driving seat.
  • Otherwise – We look at recycling, metals, and plastics and some of the challenging current margins, we also question how much damage lower carbon prices are doing to fuels markets, and whether smaller new sustainability stocks should exit the public market.

Exhibit 1: The stock could have further to go if lithium prices do not recover and the company keeps spending.

Source: Capital IQ and C-MACC Analysis, March 2024


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