Albemarle tries to take over Liontown 💵 Will lithium industry start the uptrend?

4:15 PM 29 March 2023

Albemarle (ALB.US) is the largest global lithium producer. The company's efforts are now focused on the acquisition of Liontown, an Australian mining company focused on developing battery minerals for electric cars. Analysts took the latest news from the company as a positive sign for the industry. 

Euphoric gains didn't help Albemarle valuation

Start investing today or test a free demo

Open real account TRY DEMO Download mobile app Download mobile app
  • The company's AUD5.2 billion ($3.7 billion) takeover proposal was rejected for a third time by the Australians, causing Australian lithium companies to surge. Last week, Albemarle announced the planned construction of a $1.3 billion plant in South Carolina (US). Despite the company's business development news, downward pressure is keeping share valuations at relatively low levels;
  • In 2022, lithium consumption per vehicle according to Adamas Intelligence increased by 17%. Despite this, Albemarle's share price is trading below January 2022 levels;
  • With nickel prices normalizing and cobalt in trouble, investors fear further weakening due to a potential recession and tighter credit conditions that could hit EV demand. It is unclear on what scale fiscal programs like the US IRA or China's opening will be able to stimulate demand;
  • Long-term, lithium may still be a highly desirable commodity. As of 2035, it will not be possible to sell cars with internal combustion engines in the EU except for synthetic fuels. These, however, are still in the research phase, and demand for EVs is growing.

Value of battery metals in newly-sold EVs tripled on rampant lithium, nickel prices   

Proportionate to the value of lithium in used batteries, EV began a dynamic upward trend in April 2021. The beginning of 2023 brought a slight cooling. Source: Mining.com

Short look at the 2022 lithium market

  • The 2022 Electric Vehicle Metal Index, which tracks the value of metals in EV batteries, reached $26.9 billion (232% y/y growth). The value of metals used in batteries in December 2022 alone surpassed the cumulative results of 2019 and 2020.EV battery capacity in December 2022 reached a new record by 63.6 GWh according to Adamas Intelligence (29% y/y)
  • Analysts expect higher demand for lithium from China, with recent data coming out of the country suggesting a progressive economic rebound. Higher demand could translate into higher prices which would potentially favor Albemarle's share price.
  • The metals sales business for automotive batteries and accumulators in 2022 recorded a higher sales total than the previous 5 years' total. The value of battery metals in 2022 newly sold electric cars tripled as a result of soaring lithium and nickel prices;
  • As of December 2022, a total of 38,061 tons of lithium (46% year-on-year increase) was found in batteries sold in passenger EVs on roads around the world. At that time, the price of the raw material rose to $70,000 per ton, increasing by 280% y/y. The share of nickel also increased, with the declining role and prices of cobalt having an increasingly traceable share in the EV market. We are now seeing a correction of these euphoric increases.

Value of battery metals in newly-sold EVs tripled on rampant lithium, nickel prices  

Sales of metals used in EVs have grown by leaps and bounds in recent years. It has been dominated by lithium (blue bars), although its total value has fallen from a record $2.7 billion to about $1.3 billion today. The drop in sales was reflected in the discounting of Albemarle shares. Source: AdamasIntelligence, Mining.com

Albemarle (ALB.US) shares, D1 interval. Although the SMA200 and SMA100 averages are approaching a bearish 'death cross' formation, it is still not confirmed. If the decline deepens the $170 level may be worth watching. The RSI indicator has broken out a double bottom near 30 points, which historically has been an important support for the bulls and the level from which the price rebound occurred. Source: xStation5

Share:
Back
Xtb logo

Join over 935 000 XTB Group Clients from around the world

The financial instruments we offer, especially CFDs, can be highly risky. Fractional Shares (FS) is an acquired from XTB fiduciary right to fractional parts of stocks and ETFs. FS are not a separate financial instrument. The limited corporate rights are associated with FS.
This page was not created for investors residing in Brazil. This brokerage is not authorized by the Comissão de Valores Mobiliários (CVM) or the Brazilian Central Bank (BCB). The content of this page should not be characterized as an investment offer in Brazil or for investors residing in that country.
Losses can exceed deposits

We use cookies

By clicking “Accept All”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

This group contains cookies that are necessary for our websites to work. They take part in functionalities like language preferences, traffic distribution or keeping user session. They cannot be disabled.

Cookie name
Description
SERVERID
userBranchSymbol cc 2 March 2024
test_cookie cc 25 January 2024
adobe_unique_id cc 1 March 2025
__hssc cc 8 September 2022
SESSID cc 2 March 2024
__cf_bm cc 8 September 2022
intercom-id-iojaybix cc 26 November 2024
intercom-session-iojaybix cc 8 March 2024

We use tools that let us analyze the usage of our page. Such data lets us improve the user experience of our web service.

Cookie name
Description
_gid cc 9 September 2022
_gat_UA-98728395-1 cc 8 September 2022
_gat_UA-121192761-1 cc 8 September 2022
_gcl_au cc 30 May 2024
_ga_CBPL72L2EC cc 1 March 2026
_ga cc 1 March 2026
__hstc cc 7 March 2023
__hssrc

This group of cookies is used to show you ads of topics that you are interested in. It also lets us monitor our marketing activities, it helps to measure the performance of our ads.

Cookie name
Description
MUID cc 26 March 2025
_omappvp cc 11 February 2035
_omappvs cc 1 March 2024
_uetsid cc 2 March 2024
_uetvid cc 26 March 2025
_fbp cc 30 May 2024
fr cc 7 December 2022
_ttp cc 26 March 2025
_tt_enable_cookie cc 26 March 2025
_ttp cc 26 March 2025
hubspotutk cc 7 March 2023

Cookies from this group store your preferences you gave while using the site, so that they will already be here when you visit the page after some time.

Cookie name
Description

This page uses cookies. Cookies are files stored in your browser and are used by most websites to help personalise your web experience. For more information see our Privacy Policy You can manage cookies by clicking "Settings". If you agree to our use of cookies, click "Accept all".

Change region and language
Country of residence
Language