However, we are -- and we will be dealing with the challenging market conditions for the next 12 months to 18 months. SPN sales volumes were down 7% and prices were down 2%. This pair of relatively large miners also produces more than just lithium, with the metal making up roughly 37% of Albemarle's sales and 20% of SQM's top line. Also, commodity producers are great at ruining favorable market conditions with overexpansion. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. Show Tweets Mentioning ALBHide Tweets Mentioning ALBShow Tweets Mentioning ALB, jQuery("#show_tweets").on("click",function(event, param1) { It trades... RBC is recommending its clients sell stock in chemical company and lithium miner Albemarle. Albemarle has an exceptional dividend growth record for a materials stock. Smaller players with more focused businesses present the potential for more upside, but if Tesla's lithium plans are any indication, the future could be cloudier than expected. jQuery("#hide_tweets").show(); This divergence is surprising, particularly given the exciting growth prospects of the company, which come from the high growth in the global demand for lithium. We power the potential of … jQuery("html,body").animate({scrollTop: $("#"+id).offset().top}, "slow"); They can handle some uncertainty and lean on other businesses if they need to adjust to changing market conditions. It's why the stock has nearly doubled the returns of FMC Corp in the last five years and run laps around shares of SQM.
It is good to note here that lithium is not really a commodity as lithium products are not really the same in a way copper is. //scroll_by_id("render_twitter_html"); I am researching the chemicals sector as there are many stocks with low PE ratios that look valuable at first sight. For now, everything up to 2021 is sold. Therefore, it goes without saying that Albemarle won't be maxing out its quota anytime soon, but it's comforting to know it has the flexibility to expand if needed. Well, it was accompanied by a bearish outlook report for the lithium market in general that essentially claimed producers are going to vastly overshoot market demand with production increases. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. There's a big disparity between the miners here. That's actually a long-term trend in the lithium space, so while it's not good news, it's perhaps not particularly shocking, either. jQuery("#overlay_mask").addClass("cl_show"); For now, the consensus view on why the lithium market is strained is simply that electric vehicle production hasn't caught up with demand. jQuery("#show_chart").on("click",function(event, param1) {
jQuery(document).on("click", "#hide_chart", function(){ In 2017 they delivered net margins of 25% and 22%, respectively. This trio may have more difficulty adapting to a fast changing lithium market, given Tesla's plans upend the status quo. We have to see about the trends and earnings for each specific sector so that we can make a forward-looking earnings model. Our unique natural resource position, derivatization capabilities and technology leadership allow Albemarle … In such a scenario it is always good to be the lowest cost producer. Despite the impressive dividend growth record, the dividend yield of the stock is lackluster and hence investors should not purchase the stock for its dividend. Case in point: Shares of the world's largest lithium producer, Albemarle Corporation (NYSE:ALB), have dropped 25% year to date. The Ascent is The Motley Fool's new personal finance brand devoted to helping you live a richer life.
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