The stock of Albemarle (ALB) is down 11% on reports that a lithium mine is being restarted in China.
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Specifically, the Chinese electric-vehicle-battery maker Contemporary Amperex Technology Co. Ltd., known as CATL, is restarting the Yichun lithium mine. Lithium is the main component used in electric-vehicle batteries and its price is traded like a commodity on the global market.
The restart of the mine in China means more supply and lower prices for lithium, and that’s bad news for producers such as Albemarle. Based in North Carolina, Albemarle is the fourth largest producer of lithium in the world.
Big Mine
The Chinese mine being restarted by CATL produces 8% of the world’s lithium supply. Production at the mine was paused for maintenance, though some analysts speculate that it was done to drive lithium prices higher and boost the stocks of producers.
Lithium prices are currently around $10,500, up about $2,000 since July of this year. Lithium prices peaked at $85,000 in late 2022. At the same time, Albemarle’s share price peaked at $334.55. ALB stock is now trading at $72.43 a share, down 15% on the year.
Is ALB Stock a Buy?
The stock of Albemarle has a consensus Hold rating among 20 Wall Street analysts. That rating is based on six Buy, 12 Hold, and two Sell recommendations issued in the last three months. The average ALB price target of $81.53 implies 12.56% upside from current levels.
