As most markets in the world are experiencing losses, Lithium prices and demand are still high. Although this is very good for Lithium miners such as Albemarle, electric vehicle makers are trying their hardest to lower the cost of batteries. The higher the cost of producing batteries, the higher the overall cost of electronic vehicles.
On Monday, Albemarle, a corporation involved in Lithium mining, increased its best estimates and guidance for the year 2022. Their financial forecasts show ALB with a total of sales between $5.8-$6.2 billion. Of course, adjusted earnings before taxes, interest, and other things, are expected to be between $2.2-$2.5 billion. As per share, they expect the price could land somewhere between $12.30-$15 by the end of the year.
Three weeks ago, Albemarle announced that their prediction shows sales of between $5.2-$5.6 billion. This would leave $1.7-$2 billion for EBITDA, giving the company a possible price of $9.25-$12.25 per share. As for the midpoints of the new prediction by Albemarle and its EBITDA, they imply margins of more than 39%.
Over the past 12 months, we’ve made significant progress in renegotiation more variable-priced contracts with our Lithium customers. Implementation of these contract is a key driver of the expected year-over-year improvement in our financial results. We now expect full-year 2022 adjusted EBITDA to be up over 160% from prior year…
CEO of Albemarle
Similar to Lithium, Albemarle is also focused on Bromine; a chemical used to prevent the start of a fire or slow its growth. This chemical also has a catalyst business which is currently growing. For your information, manufacturers in the energy industry use catalysts for the processing of oil.
Tesla and Other EV Stocks Down
On the other hand, the price of EV stocks such as Tesla (TSLA) is going down. The effect that inflation is having on the prices of raw materials such as Lithium is one of the many reasons for this occurrence. At the time of writing, Lithium is trading at around $70 per kilogram.
Each Tesla EV requires a minimum of five kilograms, meaning that only the Lithium costs hundreds of dollars for a single car. Moreover, there are several other materials necessary for the creation of a Tesla EV. Companies that produce EVs are constantly trying to use less nickel and cobalt for their batteries because of the price of these two materials. However, now that Lithium’s price is also increasing, even Lithium-ion batteries are more expensive.