This Week in Lithium: An Oil Giant’s Hunt for Lithium and Albemarle’s Woes
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This Week in Lithium: An Oil Giant’s Hunt for Lithium and Albemarle’s Woes

Story Highlights

The slump in Lithium’s prices led to a nearly 47% drop in Albemarle’s Q1 top line. Meanwhile, Saudi Arabia is hunting for lithium as part of its EV push.

The world’s hunger for energy, coupled with its march towards a green future is leading one of the largest energy giants in the world to hunt for Lithium. The critical battery metal is in the middle of a major slump, impacting its producers such as Albemarle (NYSE:ALB).

An Oil Giant Hunts for Lithium

At first mention, it would seem unlikely that Saudi Arabia is hunting for lithium. After all, the kingdom is known for being the largest exporter of oil globally. Yet, at the same time, the country is aiming to transform into an electric vehicle and battery production hub as part of its ambition to wean its economy away from oil.

With this goal in mind, Saudi Arabia is actively seeking lithium from global markets while also bolstering domestic supply chains. Remarkably, it’s exploring innovative methods like extracting lithium from seawater and saline discharges from its oilfields. Previously, the Saudi Public Investment Fund and Ma’aden, its mining enterprise, joined forces to invest in overseas mining ventures. Moreover, the country is eyeing potential investments in Chile’s mining industry.

Albemarle’s Woes

While new money is looking to wade into the lithium space, existing names in the sector are facing challenging times. Earlier this week, Albemarle, the largest lithium producer for EV batteries globally, reported a nearly 47% drop in its Q1 top line and missed bottom-line estimates. This was due to low prices and weakening demand for EVs. The company is now focusing on cost optimization and productivity improvements to drive its performance.   

Notably, the slump in lithium prices has prompted Albemarle to conduct lithium auctions recently to sell off its products. Previously, the lithium market primarily operated through long-term supply agreements at fixed prices. Albemarle even indicated that it might contemplate reducing capital expenditures in the upcoming years if lithium prices remain stagnant.

How Much Is LIT?

Meanwhile, at $46.05 per share, the Global Lithium & Battery Tech ETF (LIT) is currently hovering at lows last seen in November 2020.

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