Specialist
Former director at Albemarle Corp
Agenda
- Albemarle (NYSE: ALB) and the lithium oversupply issue
- Headwinds from EV (electric vehicle) demand
- Threat from lithium battery alternatives
- Pricing and contract concessions
Questions
1.
Can you update us on the market for lithium? How has the pandemic impacted supply and demand?
2.
Which aspects of Albemarle’s Q2 2020 earnings report stood out to you?
3.
We’ve noted demand destruction of autos and from EV autos, and significant demand growth for renewables in energy storage. Which do you think has had a greater impact on lithium prices in 2020?
4.
Is the high inventory in the battery supply chain specifically related to the EV market? Do you think that Albemarle’s expectations for 2020 are reasonable?
5.
Can you explain the difference in spot prices for battery-grade lithium compounds – for both carbonate and hydroxide – between China and other geographies within APAC, especially Japan and Korea?
6.
What do you think has driven the year-to-date performance of spot hydroxide and carbonate, with hydroxide holding up better in every region for the battery-grade?
7.
Would you say Albemarle’s battery-grade quality is superior to its competitors, such as SQM, Tianqi and Livent? How would you rank the respective battery-grade quality of those peers?
8.
What are your thoughts on direct lithium extraction and Albemarle’s approach to this process?
9.
What are your thoughts on Greenbushes and the balance sheet issue for Tianqi? Do you expect Albemarle to find a new partner or going for a capital increase to get the other half of this JV?
10.
Albemarle has said it wants to restart idle output in early 2021. How long do you expect the ramp-up period to take? Do you think there will definitely be extra costs incurred as a consequence?
11.
What is the upside for Albemarle in La Negra, as well as the Kemerton capital projects?
12.
How do you expect Albemarle to prioritise CAPEX, given the company’s forecast that lithium consumption will grow by almost 600% over the next few years? How much additional production capacity do you expect from Albemarle over the next couple of years?
13.
Do you expect a lithium shortage in the next 1-2 years, if coronavirus has subsided and the economy starts to pick back up?
14.
How do you think the demand forecast will affect pricing and contract negotiations? How often are those contracts negotiated?
15.
Is there any reason we should not expect hydroxide prices to converge towards carbonates?
16.
Do you think there is any tangible threat from the possibility of alternatives to lithium-ion batteries?
17.
What are your thoughts on the collaboration between the US DoE [Department of Energy] and Albemarle? What do you think those projects are ultimately trying to achieve?
18.
Are there any sustainable competitive advantages for Albemarle vs its peers – both integrated and converters – besides the resources and costs of production associated with hydroxide and carbonate?
19.
What is your overall assessment of Albemarle management’s strategic planning and execution?
20.
Which key factors and trends relating to Albemarle should investors track in the short term?
