Albemarle Q2 2026 Earnings Report

Albemarle EPS Results

• Actual EPS: $3.75
• Consensus EPS: $3.20
• Beat/Miss: Beat by +$0.55
• One Year Ago EPS: $0.11

Albemarle Revenue Results

• Actual Revenue: $1.74 billion
• Expected Revenue: $1.61 billion
• Beat/Miss: Beat by +$136.37 million
• YoY Revenue Growth: +31.10%

Albemarle Announcement Details

• Quarter: Q2 2026
• Date: 8/5/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 8:00AM ET

Albemarle (NYSE:ALB) is a leading global specialty chemicals company primarily engaged in the production and distribution of lithium, bromine, and catalysts. Its lithium segment supplies key components used in rechargeable batteries for electric vehicles, portable electronics, and grid storage systems. The company’s bromine specialty products serve a wide range of industries, including oil and gas drilling fluids, fire safety solutions, and water treatment. In its catalysts division, Albemarle provides products for petroleum refining, chemical processing and emissions control.

Founded in 1994 as a spin-off from Ethyl Corporation, Albemarle has grown through strategic acquisitions and capacity expansions to become one of the world’s foremost chemical producers. Headquartered in Charlotte, North Carolina, the company operates manufacturing facilities and research centers across North America, South America, Europe, Asia Pacific and the Middle East. These global operations enable Albemarle to serve customers in automotive, energy, electronics, construction, pharmaceutical and agricultural markets.

Under the leadership of President and Chief Executive Officer Kent Masters, Albemarle emphasizes innovation and sustainability. The company invests in research and development to improve product performance and environmental footprint, including initiatives to increase the recyclability of battery materials and reduce emissions from chemical processes. Albemarle’s commitment to safety, ethics and community engagement underpins its approach to responsible growth in critical end-use markets.

Albemarle Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong Q2 financial performance: Net sales rose 31% year over year to $1.7 billion, while adjusted EBITDA more than doubled to $858 million. Operating cash flow reached $710 million and free cash flow was $638 million, supported by higher pricing and productivity gains.
• Positive Sentiment: Specialties outlook increased: Albemarle raised its full-year specialties sales outlook to $1.4 billion–$1.6 billion and adjusted EBITDA outlook to $275 million–$325 million, reflecting stronger pricing, volumes, and mix. However, management expects third-quarter results to decline sequentially as bromine pricing normalizes.
• Positive Sentiment: Lithium market remains tight: Global lithium demand increased 45% year over year through May, led by stationary storage, while supply additions have lagged and inventories have fallen to historically low levels. Albemarle raised its 2026 and 2030 stationary-storage demand forecasts, though lithium pricing remains difficult to predict.
• Negative Sentiment: Greenbushes fire delays volume recovery: The CGP3 plant restarted on August 1 but is operating at reduced rates, and the company now assumes a return to full run rate in the first quarter of 2027. This lowers expected energy-storage volumes, partly offset by better-than-planned production and recoveries at Wodgina.
• Neutral Sentiment: DLE growth option advancing: Albemarle submitted an environmental permit application for a phased direct lithium extraction project at Chile’s Salar de Atacama, where its pilot has demonstrated recoveries above 90% and recycled approximately 85% of process water. The project remains subject to regulatory approval, community consultation, and further commercial-scale validation.

Presentation

[Operator]

Hello. Welcome to Albemarle Corporation's Q2 2026 earnings call. I will now hand it over to Meredith Bandy, Vice President of Investor Relations and Sustainability.

[Meredith Bandy, VP of Investor Relations and Sustainability at Albemarle]

Thank you. Welcome everyone to Albemarle's second quarter 2026 earnings conference call. Our earnings were released after market close yesterday. You'll find the press release and earnings presentation posted to our website under the investors section at albemarle.com. Joining me on the call today are Kent Masters, Chief Executive Officer, and Neal Sheorey, Chief Financial Officer, Mark Mummert, Chief Operations Officer, and Eric Norris, Chief Commercial Officer, are also available for Q&A.

[Meredith Bandy, VP of Investor Relations and Sustainability at Albemarle]

As a reminder, some of the statements made during this call, including outlook, guidance, expected company performance, and strategic initiatives, may constitute forward-looking statements. Please note the cautionary language about forward-looking statements contained in our press release and earnings presentation. That same language applies to this call. Please also note that some of our comments today may refer to non-GAAP financial measures. You can find reconciliations in our earnings materials. Now I'll turn the call over to Kent.

[Kent Masters, CEO at Albemarle]

Thank you, Meredith. Our strong start to 2026 continued in the second quarter, supported by disciplined execution and improving conditions across our key markets. Second quarter net sales of $1.7 billion increased 31% year-over-year, driven by higher pricing and energy storage, and both higher pricing and volumes in specialties. Adjusted EBITDA more than doubled to $858 million, with our enterprise EBITDA margin expanding to 49%. Importantly, we converted that performance into cash.

[Kent Masters, CEO at Albemarle]

We generated $710 million of cash from operations, representing a more than 80% operating cash conversion, and $638 million of free cash flow in the quarter. We are also on track to reach the high end of our $100 to 150 million full-year target for cost and productivity improvements. These results reflect a deliberate focus on operational excellence and cost discipline. We also benefit from globally diverse and resilient key end markets.

[Kent Masters, CEO at Albemarle]

Global lithium consumption was up 45% year-over-year through May, tracking above our forecasted range, driven by continued strength in stationary storage and improving growth in electric vehicles. Needed supply increases are coming to market slower than demand growth due to limited spodumene availability, temporary disruptions in shipments from Africa, and slower than expected ramp-up of Chinese lepidolite mines. As a result, inventories are low and the physical lithium market remains tight.

[Kent Masters, CEO at Albemarle]

We are improving our 2026 outlook considerations, including raising our specialty sales and EBITDA outlooks due to a strong year-to-date performance and reducing expected capital spending, thanks to ongoing capital efficiency efforts. Beyond our 2026 outlook, we are also advancing resource options that can support sustainable growth through the cycle. On today's call, I'll focus on our efforts at the Salar de Atacama, where we're leveraging decades of brine processing expertise to advance direct lithium extraction.

[Kent Masters, CEO at Albemarle]

We also have opportunities at our Australian hard rock joint ventures. Wodgina is outperforming on better-than-planned ore availability and recoveries. This is helping offset the impact of a fire at Greenbushes' CGP3 plant, which occurred on June 9th. CGP3 restarted on August 1st. I'll turn it over to Neal to discuss recent results and outlook. I will cover recent market trends and give more detail on our resources before we open the call for Q&A.

[Neal Sheorey, CFO at Albemarle]

Thank you, Kent, and good morning, everyone. I'll begin with our second quarter results on slide five. Second quarter net sales were $1.7 billion, driven by energy storage pricing up 73%, while specialties pricing and volumes were up 11% and 8% respectively. Adjusted EBITDA for the quarter was $858 million, up 155% year-over-year, reflecting higher net sales and our ongoing cost and productivity improvements.

[Neal Sheorey, CFO at Albemarle]

Both segments contributed to this strong growth, with energy storage adjusted EBITDA up 229% and specialties up 61%. Net income attributable to Albemarle was $480 million, and we reported diluted earnings per share of $3.52. Turning to slide six, I'll walk through the key drivers of our year-over-year EBITDA performance. As I mentioned, second quarter adjusted EBITDA increased primarily due to higher pricing in both segments.

[Neal Sheorey, CFO at Albemarle]

Due to higher lithium pricing, our cost of goods sold reflects increased Chilean commission payments and higher-priced spodumene inventory. The impact of higher spodumene pricing is offset by increased equity income from our Talison joint venture versus the prior year. Across both segments, cost and productivity improvements helped offset raw material and supply chain cost increases related to the situation in the Middle East.

[Neal Sheorey, CFO at Albemarle]

Corporate and all other reflects a reduction in adjusted EBITDA due to the Ketjen Refining Solutions divestiture, partially offset by favorable foreign exchange impacts. Turning to slide seven. We are maintaining our total company outlook ranges and expect to come in at the high end of the scenario ranges due to strong year-to-date performance and an increased specialties outlook. These factors offset modestly lower expected energy storage sales volume due to the fire at the CGP3 plant at the Talison joint venture.

[Neal Sheorey, CFO at Albemarle]

Our outlook ranges continue to reflect the expected impact of supply chain disruptions related to the situation in the Middle East, which we still estimate at approximately $70 to 90 million on an unmitigated basis for the full year. In specialties, we are increasing our outlook due to higher pricing and volumes, which I will cover in more detail on the next slide. The specialties segment delivered another strong quarter.

[Neal Sheorey, CFO at Albemarle]

Net sales were $424 million, up 20% year-over-year, and adjusted EBITDA was $118 million, up 61% year-over-year. Adjusted EBITDA margin was 28%, up 700 basis points from the prior year period. The solid performance in the second quarter was primarily due to higher pricing and volume and favorable product mix as a result of bromine market disruptions related to the situation in the Middle East.

[Neal Sheorey, CFO at Albemarle]

As a result, we are increasing our full-year outlook ranges, raising net sales to $1.4 to 1.6 billion and adjusted EBITDA to $275 to 325 million. This increase reflects strong year-to-date performance as our teams have worked to capture the upside of increased bromine pricing while mitigating Middle East-related supply chain disruptions through proactive cost management.

[Neal Sheorey, CFO at Albemarle]

Our second half outlook assumes stabilization of the bromine market as we've seen pricing normalize since reaching a peak in April, and it reflects continued uncertainty in the Middle East. As such, we expect third quarter net sales and EBITDA to be lower sequentially. Long term, we continue to see margin upside for the specialties segment as our business and asset diversity continues to deliver positives. Specialties benefits from diverse end markets, including electronics and semiconductors, building and construction, oil and gas, and pharmaceuticals.

[Neal Sheorey, CFO at Albemarle]

Geographic diversity also complements the platform's end market diversity and adds resilience against regional volatility. Turning to energy storage on Slide nine. Net sales increased 78% year-over-year, and adjusted EBITDA increased 229%, both driven by higher pricing. Second quarter sales volumes were 65,000 tons lithium carbonate equivalent, or LCE, with an average realized price of approximately $20 per kilogram LCE.

[Neal Sheorey, CFO at Albemarle]

Realized price was approximately 15% below market pricing due to the dilutive impact of spodumene sales on an LCE basis and the three-month pricing lag for our long-term agreements. See Slide 24 in the appendix for additional information. For the third quarter, net sales and adjusted EBITDA are expected to decrease sequentially due to lower sales volumes and assuming that pricing is lower sequentially for the quarter as it stands today.

[Neal Sheorey, CFO at Albemarle]

Additionally, energy storage margins are expected to decrease sequentially due to the timing of spodumene inventories and also assuming that today's pricing continues for the quarter. As a reminder, it takes approximately four months to ship and process spodumene purchased from the Talison joint venture. In a rising price environment, this creates a margin tailwind as we process lower cost inventory while benefiting from higher selling prices.

[Neal Sheorey, CFO at Albemarle]

In a declining price environment, that timing effect reverses and is dilutive to margins. For the full year, energy storage sales volumes are now expected to be in the range of 225,000-235,000 tons LCE or flat to down 4% year-over-year. This reflects the delay in the CGP3 ramp following the June 9 fire, partially offset by better-than-planned production at Wodgina. As Kent mentioned, CGP3 restarted last weekend and is now ramping back up. Turning to Slide 10.

[Neal Sheorey, CFO at Albemarle]

We continue to focus on converting earnings into cash, as evidenced by our performance over the last three years. First half operating cash flow conversion is at the high end of our long-term target range of 60% to 70%. In the second quarter, we benefited from increased Talison dividends and non-recurring working capital reductions driven by favorable inventory and accounts receivable.

[Neal Sheorey, CFO at Albemarle]

On a full year basis, we still expect cash flow to be impacted by $87.5 million of deferred revenue related to our 2025 customer prepayment, which benefits EBITDA but does not contribute cash, and approximately $100 million of spend related to idling Kemerton Train 1. Slide 11 highlights our continued focus on cost and productivity. Thus far, we have achieved approximately $100 million of run rate savings year to date.

[Neal Sheorey, CFO at Albemarle]

This performance puts us on track to reach the high end of our $100 to 150 million full year target. Across these gross improvements, roughly 40% has been driven by supply chain and back-office initiatives. The remaining 60% includes manufacturing cost out and incremental volumes and yield.

[Neal Sheorey, CFO at Albemarle]

Examples of these productivity improvements include debottlenecking projects at La Negra, JBC, and our lithium conversion sites in China. Importantly, these improvements continue to help us offset the supply chain disruptions and cost inflation related to the situation in the Middle East. I'll turn it back over to Kent to discuss the market outlook.

[Kent Masters, CEO at Albemarle]

First, let me highlight the breadth of Albemarle's end markets and why we are generally seeing resilient demand trends. Our portfolio serves key markets across mobility, energy, connectivity, and health, and that diversity strengthens our resilience through the cycle. Electric vehicles and stationary storage remain significant long-term growth drivers. Together, these two end markets make up about 50%-60% of Albemarle's total net sales last year.

[Kent Masters, CEO at Albemarle]

We'll talk in more detail on both these markets in a moment. In specialties, electronics and semiconductors, building and construction, and oil and gas remain key market segments. AI-related demand continues to support electronics and semiconductor applications. In oil and gas, clear brine fluid demand has remained stable in the Middle East, while geopolitical uncertainty has incentivized demand in other regions, such as the Americas and Europe.

[Kent Masters, CEO at Albemarle]

We can serve all these geographies from our global asset network, creating resilience in volatile environments like we face today. Let's now turn to a deeper dive into EV and stationary storage markets. Turning to slide 13, lithium demand is up 45% through May, primarily driven by continued strength in stationary storage. We are increasing our 2026 and 2030 stationary storage forecast ranges due to that strong demand.

[Kent Masters, CEO at Albemarle]

We now expect stationary storage battery production of 900-1,100 gigawatt hours in 2026, up 11% or 100 gigawatt hours from our prior forecast. We are also raising the low end of our 2030 stationary storage range to between 1,500 and 2,000 gigawatt hours, up approximately 9% from our prior forecast. As a result of this change, we are also raising the low end of our 2030 forecast for total lithium demand by 100,000 tons.

[Kent Masters, CEO at Albemarle]

Lithium demand growth continues to outstrip supply growth. As a result, we exited the second quarter near record lows in terms of days of lithium salt inventory. Based on mass balance calculations, we also estimate spodumene inventories are at near historic lows, and some conversion sites in China have reportedly shut down or reduced production due to the lack of spodumene availability. Lithium demand continues to diversify by application and geography as stationary storage gains share.

[Kent Masters, CEO at Albemarle]

Slide 14 highlights the strength of stationary storage demand. Global stationary storage production has nearly doubled year-over-year, with broad support across most geographic regions. Long-term demand remains supported by multiple secular trends. First, global electricity demand growth is accelerating, led by urbanization, AI and data centers, and EVs. With grid upgrades taking multiple years, stationary storage is the fastest and most cost-effective way to support grid reliability.

[Kent Masters, CEO at Albemarle]

Policy support in regions like China, Europe, and Australia improves project economics for stationary storage and renewables. We now expect stationary storage to make up about 30% of 2026 global lithium market demand, nearing parity with light-duty EVs. Turning to slide 15, year-to-date, global EV sales are up 10% year-over-year. EV sales growth inflected in the second quarter, up 16% versus prior year.

[Kent Masters, CEO at Albemarle]

European EV demand remains strong, up 31% year-to-date, driven by policy support in key markets like the U.K., Germany, France, and others. Europe also benefits from increased model availability and affordability as Chinese OEMs have increased exports and domestic production for the region. In China, growing EV exports and larger battery sizes have helped offset weaker domestic EV unit sales.

[Kent Masters, CEO at Albemarle]

The rest of the world was the fastest-growing region in the first half, up 90% year-over-year, and has overtaken North America as the third-largest market, led by growth in Brazil, Australia, India, and South Korea. Turning to slide 16 for an update on our Australian joint ventures. As previously mentioned, Greenbushes' CGP3 plant restarted on August 1st. We had previously expected the plant to reach full run rate by year-end. Prior to this incident, the plant was ramping ahead of schedule.

[Kent Masters, CEO at Albemarle]

To ensure adequate contingency for our downstream operations, we've assumed CGP3 reaches full run rate in the first quarter of 2027. Greenbushes is in the middle of a multiyear transformation. Mine optimization studies are progressing well, and we anticipate operational improvements and further brownfield expansion projects. Our primary focus remains on operating the mine safely, and we have good alignment with all partners towards that goal.

[Kent Masters, CEO at Albemarle]

At Wodgina, operations are performing well, supported by better than planned ore availability and recoveries. All three processing trains are now operating. Ore quality is expected to remain consistent next quarter before improving later this year as the availability of clean ore increases. As we have highlighted before, these hard rock assets are an important part of our long-term resource position and provide near-term brownfield growth opportunities.

[Kent Masters, CEO at Albemarle]

Moving to slide 17. Albemarle has decades of brine processing expertise at Magnolia and Silver Peak in the U.S., the Salar de Atacama and La Negra in Chile, and JBC in Jordan. That foundational experience informs how we are advancing DLE technology at the Salar de Atacama. Our dedicated team of scientists, engineers, and operators have a deep understanding of DLE fundamentals based on more than 10 years of research and innovation.

[Kent Masters, CEO at Albemarle]

Over that time, we've evaluated dozens of DLE technologies, including both proprietary and third-party solutions. Our highest and best opportunity to leverage DLE is in the Salar de Atacama, based on the large scale and high grade of that world-class asset. At the Salar, we have progressed from scientific research and lab-scale work to pilot validation and integrated pilot testing. In March of 2026, we submitted an environmental assessment permit for a DLE project at the Salar de Atacama.

[Kent Masters, CEO at Albemarle]

Our phased approach to DLE is intended to support future growth and sustainability while leveraging Albemarle's existing infrastructure and process chemistry expertise. We intend to advance this project prudently, subject to regulatory approvals, community consultation, and technology validation. On slide 18, we show our phased DLE concept at the Salar de Atacama. Our current environmental permit submission seeks authorization for up to six trains.

[Kent Masters, CEO at Albemarle]

The planned investment will start with one train as we prove the technology at a commercial scale. Under this scenario, lithium-rich brine would be extracted from the Salar through pumping wells and sent in parallel to the existing evaporation ponds and the proposed DLE plant. The concentrated lithium solution from the DLE plant would be combined in the final solar evaporation ponds and further concentrated before being converted at La Negra into battery-grade lithium carbonate.

[Kent Masters, CEO at Albemarle]

Our proposed DLE plant does not use solvent extraction, meaning that we retain the option to reincorporate the lithium-depleted brine back into the Salar through dedicated wells. The Atacama integrated pilot plant has operated for more than a year. Our over 3,000 operating hours giving us valuable data and confidence in our process design and scale-up capability. Recoveries are critical to efficiency and sustainability, particularly in brine deposits.

[Kent Masters, CEO at Albemarle]

This is something we've worked on for years. A conventional pond system recovers about 30% to 40% of the lithium in extracted brine. With Albemarle Salar yield improvement technology, we've been able to increase recoveries to 50% to 60%. Our DLE pilot plant has demonstrated recoveries of over 90%, allowing us to extract more lithium with a smaller footprint and more fully utilize this world-class resource. Our team is also focused on minimizing water footprint in Chile.

[Kent Masters, CEO at Albemarle]

Approximately 85% of processed water is recycled at the current DLE pilot plant. Our DLE project is consistent with our broader strategy: leverage our world-class resources, technical expertise, and existing infrastructure to create durable long-term value while improving sustainability outcomes. In summary, Albemarle delivered another strong quarter, including net sales of $1.7 billion and cash from operations of $710 million.

[Kent Masters, CEO at Albemarle]

We are improving our 2026 outlook considerations by increasing specialties outlook, optimizing capital expenditure spend, and tracking toward the high end of our cost and productivity target. We are also capitalizing on long-term secular growth opportunities in energy transition and energy resilience, including strong global grid storage demand. Finally, we remain focused on execution and disciplined capital allocation to enable us to grow ratably through the cycle. With that, I'll turn the call over to the operator for Q&A.

[Operator]

We will now move into our Q&A portion. If you'd like to ask a question, please press star five to raise your hand. As a reminder, that is star five to raise your hand. Also, please bear in mind this Q&A session is limited to one question and one follow-up per person. Our first question comes from David Begleiter with Deutsche Bank Securities. Your line is now open.

[David Begleiter, Director at Deutsche Bank Securities]

Thank you. Good morning. Kent and Neal, can you just clarify your comments on guidance coming at the top end of the scenario ranges? Which one are you referring to? Total company or energy storage? Just some clarification, that would be great. Thank you.

[Neal Sheorey, CFO at Albemarle]

Good morning, David. This is Neal. It's really both, maybe I can clarify that a little bit. We were referring to the $20 per kg LCE scenario. Actually, there's a couple of reasons why we say that we're towards the top end. First of all, if you look at market pricing so far this year, in the first half of the year, it has trended actually on average a little bit higher than $20.

[Neal Sheorey, CFO at Albemarle]

Naturally, that pushes us towards the higher end of the $20 range. In addition to that, obviously, we've had a little bit better volume performance in the first half of the year. We've been working on our cost and productivity improvement. At at least at an enterprise level, you had the very strong performance from specialties, particularly in the second quarter.

[Neal Sheorey, CFO at Albemarle]

For all of those reasons, at an enterprise level, if pricing had been at that $20, we would be towards the upper end of that range in the first half of the year. The same would be true for the energy storage segment as well.

[David Begleiter, Director at Deutsche Bank Securities]

Very helpful. Kent, just on a potential government funding for lithium. There's been increasing talk about the government focused on critical mineral supply chain and shoring that up in the U.S. Can you talk about where you stand on those discussions? Thank you.

[Kent Masters, CEO at Albemarle]

Okay. Look, there has been a lot of talk about it and discussions, we've talked to the government quite a bit. We've been involved in that process for quite some time. We don't have anything to tell you about today that involves that. It continues around critical minerals. Lithium's probably not the highest priority across all those critical minerals, you probably see that from the projects that they've announced. We have conversations. We're talking to them, we have nothing to tell you about today.

[David Begleiter, Director at Deutsche Bank Securities]

Thank you.

[Operator]

Our next question comes from Patrick Cunningham with Citi. Your line is now open.

[Analyst at Citi]

Hi, good morning. This is Rachel for Patrick. You've noted lithium demand is accelerating higher than expectations and growing faster than supply. Curious to hear your latest thoughts on the supply side of the equation and if the market requires higher pricing levels to support new investments.

[Kent Masters, CEO at Albemarle]

Okay. You kind of said it. Demand is a little stronger than we were anticipating. It is strong. EVs were weak in the first quarter, but they kind of trended back in the second quarter. Energy storage demand is kind of off the charts. With EVs coming back, there is strong demand. Supply's a little behind that. When we look out, say, for the year, there is supply coming on, and you always need that supply to come on because this market is growing. It's behind demand.

[Kent Masters, CEO at Albemarle]

That's probably why you see inventories getting down to levels which we haven't seen for a while. The inventory, so the physical market is very tight. There are projects on the board. We expect investments to come. You need that to keep up with supply. Your question about is pricing driving that. I mean, we're in a range where people will invest in good projects and more speculative projects probably not. It's not a bad place from a pricing perspective. I don't think it's driving projects that weren't planned, and it's not taking projects that were planned off the books. It's not a bad place to be.

[Analyst at Citi]

Got it. Thank you so much for that. You've raised both the 2026 and 2030 stationary storage demand forecast. Curious to hear if anything changed specifically in your customer discussions or project pipeline visibility to give you the confidence to increase the longer-term outlook. Thank you.

[Kent Masters, CEO at Albemarle]

Yeah. Look, I think it's just the confidence that we see in the projects that are happening, the supply chain that's getting built out and all the activity. Eric, maybe you want to talk about any specific customer discussions that give us more confidence?

[Eric Norris, Chief Commercial Officer at Albemarle]

Well, most of the chemistry in question that we're talking about that's driving this, is driving our demand is iron phosphate chemistry that comes out of China. Our customer discussions there indicate a market that is tight and struggling to keep up with installation demand. Installations are exceeding actual battery production.

[Eric Norris, Chief Commercial Officer at Albemarle]

We can track sort of about a one-year lag between when lithium is sold and when it goes into an installation. The latter, the installation number that's been announced is larger than what's being produced today, and that drives a healthy market, and we're seeing that in our customer base in China right now.

[Operator]

Our next question comes from John Roberts with Mizuho. Your line is now open.

[John Roberts, Managing Director at Mizuho]

Thank you. Could you talk a little bit about the constrained supply out of both Africa and China, lepidolite? How long would you expect that to last?

[Kent Masters, CEO at Albemarle]

That's been a story over the last year, I would say, and it's starting to move. You see that starting to move and that'll go into the back half of the year of a bit of additional supply. I think it's a little different. Africa's moving a little faster. Lepidolite, I think we've seen one mine come back on and start to ramp up. That will add capacity, but as we said, the market's pretty tight. Inventories are low. We kind of need that capacity.

[John Roberts, Managing Director at Mizuho]

What's the sequential price assumed for bromine in the specialties guidance?

[Neal Sheorey, CFO at Albemarle]

Hi there, John. This is Neal. It's hard to give you a specific price on bromine for the third quarter. Mainly because, as we've shown you before, there is a bromine index in China, but only about a third of our volume tracks that bromine index. One thing I will say about the Chinese bromine index, which you can observe, is that index hit a peak back in the second quarter and has come back down to levels today that are probably closer to where we started the year.

[Neal Sheorey, CFO at Albemarle]

That's one data point. The other data point is that, look, I think supply-demand fundamentals were quite a bit tighter in the first half of the year due to the situation in the Middle East and as some supply chains were reorienting. Right now what we're assuming is that there's a little bit more normalized kind of supply-demand fundamental in the back half of the year. I will admit, we're watching this closely because obviously the situation in the Middle East hasn't gone away. Generally speaking, we're assuming that pricing kind of holds where it is today, but it is a live situation.

[John Roberts, Managing Director at Mizuho]

Thank you.

[Operator]

Our next question comes from Arun Viswanathan with RBC. Your line is now open.

[Arun Viswanathan, Analyst at RBC]

Great. Thanks for taking my question. Hope you guys are well. I guess first off, just wanted to ask about the volume picture. Maybe we can get some initial expectations for volume for next year. You will be facing maybe some limitations this year just given the fire, That could be offset by Wodgina extra production. Do you expect to grow volumes next year? And maybe kind of in the low single-digit range, or how should we think about how volumes evolve from here for energy storage?

[Kent Masters, CEO at Albemarle]

I'll start with that. I would say this year is, I think we'll get close to offsetting the fire at Talison with extra performance at Wodgina. We were kind of tight there. We kind of pulled back on our volume estimates a little bit, We think we can cover that for the most part. That'll make us kind of flat year-over-year just because of our capacity.

[Kent Masters, CEO at Albemarle]

We will have growth into next year as CGP3 ramps. We won't get a full year of it probably next year. I mean close. We're saying we'll get close to full production in the first quarter. You'd see that annualizing as we go forward. We'll have room for growth next year. You can do the math on what that looks like. It's high single digits, I would say.

[Neal Sheorey, CFO at Albemarle]

Arun , maybe I can point you back to, this is a slide that we put out, gosh, I think it might've been two quarters ago, I don't expect you to remember this. But if you follow our 15% CAGR volume growth that we've said we're doing from 2022 to 2027, that would put 2027 in the range of 240,000-260,000 tons LCE. I would say now that CGP3 is back and ramping back up, we're back on that trajectory. That's maybe a way to think about 2027.

[Arun Viswanathan, Analyst at RBC]

Okay, great. Thanks for that. Appreciate it. Then just as a follow-up, just on the pricing outlook, you guys had mentioned that the market is relatively tight. Energy storage demand is very robust. Would you agree that we've seen anticipatory price declines ahead of new supply coming back online? Specifically the lepidolite as well as the Zimbabwe tons.

[Arun Viswanathan, Analyst at RBC]

Do you expect that decline, the recent price declines to kind of plateau and moderate as you go into the second half? Or do you see continued price declines possible, especially given the low inventory levels that you mentioned. Why have prices, I guess, been going down and do you expect that to stop? Thanks.

[Kent Masters, CEO at Albemarle]

We're not going to tell you what we think the price is in the quarter. We've not been very good at predicting that. It's a very speculative market, driven by traders in China, for the most part. With the inventories tight, the demand that we've seen, you do have a forecasting volumes coming back on, again, with the growth rates we see, we need that.

[Kent Masters, CEO at Albemarle]

Otherwise, you're going to get into a more difficult problem. Price, it was up, it has come back. It's kind of, I'd say consolidating right around the price where it is right now, which is around $20 or so. That's not a bad price, as we've talked about. Can't speculate as to what it's going to do. It's very heavily driven by trading and someone's view of volumes coming on. We do see those volumes coming on, we need that with the growth rate, with the 45% growth, you're going to have to have supply coming on or it's going to get very tight.

[Arun Viswanathan, Analyst at RBC]

Thanks.

[Operator]

Our next question comes from Laurence with Jefferies. Your line is now open.

[Laurence Alexander, Analyst at Jefferies]

Given your progress with the DLE at the Atacama, can you give your perspective on the attractiveness or not of projects elsewhere in Chile? What would you need to see for those to move up your priority list?

[Kent Masters, CEO at Albemarle]

Well, look, DLE, we've done a lot of work over time, and we've kind of prioritized the Salar de Atacama for that. That's our focus. We've still got technology development work to do, but we feel pretty good about it, enough that we've submitted the permit and we've kind of built a plan around that. I think I want to execute on that project first and then see where that goes against other resources in Chile or in other places in South America or wherever. I think we're getting more confidence in DLE and brine resources, but we want to execute against the project in the Salar de Atacama, then we'll be able to talk about that.

[Laurence Alexander, Analyst at Jefferies]

Thank you.

[Operator]

Our next question comes from Joel Jackson with BMO. Your line is now open.

[Analyst at BMO]

Hi, good morning. Thanks for taking the question. It's Evan on for Joel. Your cash buildup has been quite large recently, some of your peers have announced restarts and project go-aheads. When would we expect you to go ahead with some of your brownfield projects? Short of that, how does the company want to use your extra cash?

[Kent Masters, CEO at Albemarle]

Okay. Let me start with projects. We're executing against that now. You see CGP3, we would consider that one of those. It's online now and ramping up after we had some issues there. The other projects, we have not gone through an FID. We've not agreed those project with our partners either. There's potential for doing projects both in Wodgina and at Talison additional.

[Kent Masters, CEO at Albemarle]

We need to ramp CGP3 before we take that on. Again, we'll have to agree with our partners and get to FID, it's going to take us a little bit of time, that would be our next phase of growth. Further out is the Salar de Atacama project that we're talking about is another, we have Kings Mountain. Further out, we have Antofalla. Those are all resources we own.

[Kent Masters, CEO at Albemarle]

There's potential there could be other resources that become available. Your cash question, we want to have a strong balance sheet, we've been doing that. We've used it for that. These growth projects are a big opportunity for us to invest, we think given brownfield nature in jurisdictions that we know with partners that we know with technology that we know, we feel that those are low risk, good return projects. That said, we're always evaluating projects against all alternatives for the use of capital, we do that every time we look at a big investment.

[Analyst at BMO]

Great. Thanks. Would you mind providing an update on the ramp of CGP3? Just any color you could give on the ramp. Thank you.

[Kent Masters, CEO at Albemarle]

It's been back on about five days now. It's operating at reduced rates, but it's operating, I think, reasonably well as what we would have expected to be five days in from a restart.

[Analyst at BMO]

Thank you.

[Operator]

Our next question comes from Vincent Andrews with Morgan Stanley. Your line is now open.

[Vincent Andrews, Managing Director at Morgan Stanley]

Thank you, and good morning, everyone. Excuse me. Neal, can I ask you on Specialties, just to give us a little bit of help bridging things into 2027, sort of all else equal. How do we think about the normalization of the bromine price versus the incremental cost, the $70 to 90 million, which I assume is largely in Specialties?

[Vincent Andrews, Managing Director at Morgan Stanley]

It would seem like for the year that the higher price has offset the $70 to 90 million, will that $70 to 90 million go away in 2027, assuming there's resolution of the conflict by then? Within the non-Chinese index business, has there been any benefit to you from the disruption caused by Iran in terms of have you gained any market share? Have your prices gone up in that part of the business? Is that we're really just talking about the Chinese index volume that we need to think about?

[Neal Sheorey, CFO at Albemarle]

Okay. A lot in there, Vincent. Let me answer maybe the first half, starting there, then I'll pass it over to Eric to talk about the market piece of things in the back half of your question. Look, with regards to Specialties, it's probably too early for me to say what's going to happen to that $70 to 90 million impact. I would just be guessing at the situation in the Middle East.

[Neal Sheorey, CFO at Albemarle]

Obviously, if things resolve there, certainly, we would hope that some of that cost escalation would go away or some of those supply chains will get back to kind of a normal position. That would be helpful to us. I would say the team has done a really great job of managing through the situation in the Middle East so far in the front end of this year.

[Neal Sheorey, CFO at Albemarle]

That $70 to 90 million, we didn't really see a lot of that impact yet in the first half of the year. But again, the situation is still a live dynamic, that's why we continue to say we still think that there's this potential through the year. With regards to margins in 2027, you're right. The bromine pricing has really increased here in the first half of the year due to some exogenous factors that has pushed our margin up pretty considerably.

[Neal Sheorey, CFO at Albemarle]

We're using this moment right now to continue to focus on cost and productivity, specifically in the Specialties business. To get the profitability of that business back into a better place than where it has been in the last year or two. I think even though you might have pricing kind of coming off, maybe potentially as we go through 2027, certainly not as strong as we've seen in 2026.

[Neal Sheorey, CFO at Albemarle]

I do expect that some of the cost and productivity that we're working on is going to shine through. Net-net, I think that's why we continue to say we're on this multi-year journey of improving margins in specialties, and we'll have more to say, I think, as we go through this year and start preparing for 2027. Maybe with that, I'll pass it over to Eric to talk about the market.

[Eric Norris, Chief Commercial Officer at Albemarle]

Yeah. Vincent, you may or may not know this. It's a fairly diverse business. The upstream part of the business, which is elemental bromine and HBr, that's the part that is traded in the China market and where you see a price index, rather, I should say, in the China market, the SunSirs index. That's well less than a third of our business.

[Eric Norris, Chief Commercial Officer at Albemarle]

Certainly that skyrocketed up. That provided some opportunities, and there was a benefit to that. The vast majority of our business is downstream. It's the derivatives we sell downstream, and those have localized to their markets, pricing dynamics, in some cases, limited competition where we have a differentiation play. In other cases, a regional play where we have a regional ability to supply that others can't, particularly in a volatile market.

[Eric Norris, Chief Commercial Officer at Albemarle]

We're able to take advantage of that, both from a volumetric basis and in a few cases, price-based. The balloon, if you will, the pricing you're referring to is a pretty isolated part of our cost structure. The other thing we do across this business is, goes to the 70 to 90. It's a second pricing mechanism. It's the pass-through of higher raw material costs. That obviously ebbs and flows with what those raw material costs will do over a period of time. That's separate and apart from what you saw in the upstream part of the business in China. Don't know if that helps, but I think it's a more diverse business.

[Eric Norris, Chief Commercial Officer at Albemarle]

As we go forward, I just want to emphasize, we are looking at how we significantly improve the productivity and cost in this business and optimize some of those profitabilities in what is a pretty complex downstream set of derivatives with some good opportunities to do that we expect to frame a more improved profitability going forward.

[Neal Sheorey, CFO at Albemarle]

Independent.

[Vincent Andrews, Managing Director at Morgan Stanley]

Thank you for all the detail. Very helpful. I'll pass it along. Thank you.

[Operator]

Our next question comes from Joshua Spector with UBS. Your line is now open.

[Joshua Spector, Managing Director at UBS]

Yeah. Hi, good morning. I was wondering if you could share some of your thoughts around some of the China battery tax breaks, and how that might impact lithium demand, if at all, and if that has any ability on an ability to pay for lithium into that market. Just curious how you'd see that play out.

[Eric Norris, Chief Commercial Officer at Albemarle]

I'm sorry. Could you repeat the question again? I'm sorry. It was with regard to China. Could you repeat it?

[Joshua Spector, Managing Director at UBS]

China tax breaks specifically on batteries, how you see that impacting China demand, if at all, and how that potentially impacts the ability to pay for lithium?

[Eric Norris, Chief Commercial Officer at Albemarle]

Yeah, I would say, what we are seeing in the market, particularly on the grid storage side, is that any changes in tax, there's been a consumption tax change. There's been a rollback of VAT on exported batteries that's phased in, has been overwhelmed by demand. Yes, there have been moments of time where I think people are trying to get orders in before certain things expire.

[Eric Norris, Chief Commercial Officer at Albemarle]

The demand has been so strong that it has offset really any impacts we're seeing there that are of significance. That's on the stationary storage side. There have been changes on the EV side as well. That has led to a change in incentive regime.

[Eric Norris, Chief Commercial Officer at Albemarle]

That has pushed actually towards higher energy density batteries, which has helped increase the gigawatt hours even as unit sales have been lower this year, although now recovering after a pull forward demand into last year in that incentive regime.

[Joshua Spector, Managing Director at UBS]

Thanks. That's helpful. If I just ask on volume growth into next year, given that's out of Australia, should we assume that that's primarily spot volume, your mix will shift that way? Are there any other conversations happening on the rest of your volumes to perhaps get more of that back into a contract type structure?

[Neal Sheorey, CFO at Albemarle]

Well, it's kind of hard to say, but it's probably a mix across the portfolio, right? There will be probably more spot, but some of our contract volume. I wouldn't assume it all goes spot, but it's probably the same mix of our normal portfolio.

[Eric Norris, Chief Commercial Officer at Albemarle]

Yeah.

[Joshua Spector, Managing Director at UBS]

Okay

[Eric Norris, Chief Commercial Officer at Albemarle]

I would say there are two things. I think that might be the right, the answer to your immediate question maybe gives an opportunity to make a broader point, which is there are two things that are driving our mix that are going to result in a higher proportion of volume that's either spot or sold under shorter duration contracts.

[Eric Norris, Chief Commercial Officer at Albemarle]

One is China's growing faster than the rest of the world, and the other is that generally spodumene is done not on long-term contracts. It's done on a market base or a shorter term. We do have some longer term, but they're not done under this sort of floor ceiling basis. They're done on a market basis.

[Eric Norris, Chief Commercial Officer at Albemarle]

As a result, that percentage of contracts that we have that are under, that we refer to as long-term agreements with floors and ceilings, has become slightly smaller because of those two mix phenomenon that's going on in the market.

[Joshua Spector, Managing Director at UBS]

Thank you very much.

[Operator]

Our next question comes from Matthew DeYoe with Bank of America. Your line is now open.

[Matthew DeYoe, Senior Equity Research Analyst at Bank of America]

Morning. I have two. First, Eric .Global lithium demand tracking 45%, clearly very strong. I know this is no easy task, but when you look at the initial range given on the year, particularly like the +15, where do you think you were most wrong or overly cautious? Is that still a looming threat as it relates to potential decelerations, or do you think that has been debunked?

[Matthew DeYoe, Senior Equity Research Analyst at Bank of America]

On the DLE plant, just conceptually, is the goal to increase concentrations of lithium before it hits the brine ponds, or are you removing magnesium? Can the DLE plant operate independent of the brine ponds, or is it just an added part of the loop? If it's the latter, what's the net economic benefit between added OpEx and added recoveries?

[Eric Norris, Chief Commercial Officer at Albemarle]

Yeah. I can answer the first question and I'll let Kent answer the second one. With regard to where we were most wrong, look, I think we were honest when we gave guidance at the beginning of the year and told you where we think we could be wrong, which was the growth in grid storage. We'd come off a year that frankly, surprised us in the prior year, 2025.

[Eric Norris, Chief Commercial Officer at Albemarle]

The rate of growth, somewhat driven by AI, also driven by grid reliability, and finally driven by renewables growth, was incredibly strong last year, and we were redoubling our efforts to better get underneath the hood of that. This is a market that's new. It's supplied largely, as you know, LFP out of China. There was some effort on our part to get our hands around that, and that put that range on that. The upper end of that range was, if you will, sort of a sustained momentum coming out of 2025.

[Eric Norris, Chief Commercial Officer at Albemarle]

The lower end of the range was a pullback. The pullback didn't happen. I think another fact you have to remember is that policy plays a role here. Incentives, tariffs, geopolitical aspects, those were unknowns to us as well. Per the prior question about did any tax headwinds slow down demand, they did not. Those were things we needed to see in the market before we could get comfortable with the higher end of the range.

[Eric Norris, Chief Commercial Officer at Albemarle]

Grid storage or stationary storage in general is at a point where it's going to start to become as big a part of this market potentially as light-duty vehicles, EVs. We have a higher degree of confidence around that now, I would say. Do you want to answer the DLE question, Kent?

[Kent Masters, CEO at Albemarle]

Yeah. You see from the chart we put out, it's a hybrid approach that we're taking. We're still trying to leverage the solar evaporation in the pond system, and the assets that we have. We'll take a side stream from the normal pond system, run that through DLE, concentrate it, and then put it back into the pond system to finish it.

[Kent Masters, CEO at Albemarle]

It's a hybrid system. It's a new approach. It's not full DLE. You could run full DLE, technically, but we have those assets, and for the efficiency, I mean, the solar evaporation is a very efficient way of doing this. We're kind of kicking that. We're trying to leverage both the solar evaporation and the technology to get us more volumes and lower pumping rates, which allows us to get those more volumes.

[Operator]

Our next question comes from Kevin McCarthy with Vertical Research Partners. Your line is now open.

[Kevin McCarthy, Partner at Vertical Research Partners]

Yes, good morning. Thank you very much. My first question is on inventories. Can you provide an update on where your own inventories are on a unit basis relative to what you would consider to be optimal? Then, externally, would welcome any thoughts that you have on inventory levels throughout the supply chain.

[Neal Sheorey, CFO at Albemarle]

Yeah. Good morning, Kevin. This is Neal. I'll start on the first part. Then I'll pass it over to Eric to talk about what he's seeing in the overall supply chain. Look, our inventories, we certainly ended the quarter lower than normal. You probably have done the calculation around our working capital. We tend to think about our working capital running at about 25% of sales.

[Neal Sheorey, CFO at Albemarle]

We ended the 2Q more like 19% of sales. A good bit of that is because we ran into our inventory, or we consumed some of our inventory in the quarter. Part of that being because of the strong demand that we saw, part of that being because of the CGP3 fire that happened at the beginning of June. We were able to pivot into our inventories to be able to supply the market.

[Neal Sheorey, CFO at Albemarle]

Where I would put our current inventories are probably historically on the low side, and we'll need to build that back up, obviously, to be able to navigate the back half of the year. Then also be prepared for 2027 as well. Maybe I'll pass it over to Eric then to talk about the market inventories.

[Eric Norris, Chief Commercial Officer at Albemarle]

On the market side, follows the narrative that Kent said earlier and what is physically a very tight market. On the lithium carbonate side in particular, it's under three weeks of inventory, and in the upstream sort of converter cathode arena. In hydroxide, it's under a month. Those are the levels that at a month, for either of those, we would have declared it a tight market. Now we're under that. It's an illustration of a market that is quite tight at the moment.

[Eric Norris, Chief Commercial Officer at Albemarle]

As you move downstream, we have indication, this is a little more opaque, but our take would be that battery inventories are also not that high either. That would make sense if you take that with the comments I made on stationary storage earlier, where installations are exceeding battery production. Basically, the material, as soon as it's made, is going out into an installation. Similarly, while EVs has been weak, the main part of this market now, particularly out of China, has become the LFP market, and that's being driven by this .Very much by the stationary storage dynamic. Net net at a very tight market.

[Kevin McCarthy, Partner at Vertical Research Partners]

That's very helpful and maybe a good segue to my second question, Eric, on energy storage. I appreciate the detail you set forth on slides 13 and 14. If I did my math correctly, the new 2030 range, after the doubling, let's say this year, it implies, I don't know, a mid-teens sort of a CAGR, which strikes me as relatively conservative. Just curious as to what kind of visibility or how conservative you think that medium to long-term glide path is on the energy storage side.

[Eric Norris, Chief Commercial Officer at Albemarle]

Look, I'll pair your question with an earlier question, Kevin, that focused on how we were cautious at the beginning of this year. I think we've gotten to a point where we're more comfortable with our demand projections for this market in the next couple of years. As to the next five years, I think we're going to have to spend more time working on that. This is a market that the trend's favorable in that the market has proven stronger than we thought throughout. I don't know that that's going to be the case for sure. This is our best estimate at the moment.

[Kevin McCarthy, Partner at Vertical Research Partners]

Thanks very much.

[Operator]

Our next question comes from Chris Perrella with Wolfe Research. Your line is now open.

[Harris Fein, SVP at Wolfe Research]

Great. Thanks. This is Harris Fein for Chris. Just with the EBITDA bridge on slide six, it looks like COGS were about a $150 million headwind, and that includes the spodumene price flow through, the Chilean royalties, and the productivity. Are you able to parse out those three components? How should we be thinking about the quantum of the sequential spodumene inventory impact into the second half? Thanks.

[Neal Sheorey, CFO at Albemarle]

Yeah. Look, I won't give you exact numbers around what drove COGS around all three of those items, but you can imagine that the spodumene lag or the spodumene inventory impact is the largest portion of the COGS driver. That usually is the case for us. In terms of how to think about maybe the spodumene cost lag as you go into the third quarter, look, the average market spodumene price in the second quarter was about $2,500, somewhere around there, per ton, thereabout. I think right now we're probably in the $2,000 range kind of case.

[Neal Sheorey, CFO at Albemarle]

Again, remember that it takes about four months for spodumene to move through our inventory system and eventually get into salts and then to the customer. Take all of that into consideration that you will see this higher price spodumene rolling through our income statement in the third quarter, and that's just naturally because of where market prices were in the second quarter.

[Harris Fein, SVP at Wolfe Research]

Got it. Helpful. I'll take another shot at a question someone asked earlier. CapEx is coming down, but it looks like the supply-demand gap is actually widening. You're generating a healthy amount of cash. The balance sheet's pretty clean. In terms of incremental uses of cash, are we still thinking debt paydown? Is it more build cash and preserve optionality? How should we be thinking about that?

[Kent Masters, CEO at Albemarle]

Yeah. I've said it before, you're probably going to get the same answer, but we wanted to have a conservative balance sheet. We do at the moment. There's not a whole lot of debt to pay down right now at the moment. We do have growth projects. Capital is coming down. I think of that more as capital efficiency. We're getting more and more focused to try and drive efficiency in that, we've been on that now for a couple of years, I think we're getting better at that.

[Kent Masters, CEO at Albemarle]

There'll be growth projects that we layer. We've talked about brownfield projects. There's a couple brownfield projects we've got. We've talked about the Salar de Atacama. You know about Kings Mountain. We have a portfolio of growth projects in the queue. We've just not really kicked off any of those at the moment. We're not spending heavily against that. We do have good growth projects, again, as I said before, in jurisdictions we know, in technology we know, and with partners that we know.

[Kent Masters, CEO at Albemarle]

We feel pretty good about those projects going forward. That's going to be where you see our focus. Again, we'll compare that against everything else, all the other alternatives, including our own shares. We always look at that when we do a big investment, that doesn't change.

[Operator]

Alec, our last question comes from Mazahir Mammadli with Rothschild & Co. Your line is now open.

[Mazahir Mammadli, Analyst at Rothschild]

Thank you. Just wanted to ask about lithium production. The spodumene production surprise, should we take it as a bit of a one-off, or is it a structural uplift in the production in ore quality? On CGP3, basically the Q1 2027 ramp-up timelines, it looks like it doesn't represent a massive slip versus the pre-fire expectations. Does that mean before the fire, you were kind of running ahead of the schedule on the ramp-up? Thank you.

[Kent Masters, CEO at Albemarle]

Yeah. Okay. Greenbushes first. You may have to remind me of the other question. We were running a little bit ahead, now this is our risk-adjusted view of that. It's basically we just slipped the schedule from Where we were by the outage. Of the outage period, we've kind of shifted to that. That gets us to the first quarter. As we said, we've been up five days now. The restart, all that's going well. We're running at reduced rates, we're back on a ramp schedule, that's our best guess is that first quarter. That's kind of all I can say. Sorry, can you remind me of your Oh, Wodgina.

[Mazahir Mammadli, Analyst at Rothschild]

Yeah.

[Kent Masters, CEO at Albemarle]

Yeah, look, we were working toward better ore, that was in the plan. We just got there a little sooner. We're a little bit more efficient in getting there. We've still got to work through some of that, we expect later to get even better quality ore. It was the plan. We got there a little early, it's fortunate that it was at a time when it offset the fire at Greenbushes.

[Mazahir Mammadli, Analyst at Rothschild]

All right, thank you. Maybe if I could get your view on the supply-demand balance, specifically, what's your thinking of the impact of production restarts, projects such as Bald Hill, that has been restarted recently? Do you think that's enough to make a dent in the supply-demand balance?

[Kent Masters, CEO at Albemarle]

Look, you see that you've got 45% growth, right, in demand. You need some supply to keep up with it. What we see right now, we're behind that curve at this part of the year, which is why I think you see inventories being tight. Some of those coming on, lepidolite, the African stuff, will make a bit of a dent in that. You need 45% to stand still, and it's hard to see getting 45%.

[Operator]

Thank you. That's all the time we have for questions. I will now pass it back to Kent Masters for closing remarks.

[Kent Masters, CEO at Albemarle]

Thank you, operator, thank you, everyone, for joining us today. Let me leave you with this. We continue to execute with discipline. Our end markets are strong, growing, and increasingly diverse, we are progressing growth options focused on our world-class low-cost resources. We remain focused on operational excellence, disciplined capital allocation, and the durable competitive strength that set Albemarle apart. I look forward to sharing more milestones and successes with you in the coming quarters. Thank you.

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Participants

Executives

• Meredith Bandy, VP of Investor Relations and Sustainability
• Kent Masters, CEO
• Neal Sheorey, CFO
• Eric Norris, Chief Commercial Officer

Analysts

• David Begleiter, Director at Deutsche Bank Securities
• Analyst at Citi
• John Roberts, Managing Director at Mizuho
• Arun Viswanathan, Analyst at RBC
• Laurence Alexander, Analyst at Jefferies
• Analyst at BMO
• Vincent Andrews, Managing Director at Morgan Stanley
• Joshua Spector, Managing Director at UBS
• Matthew DeYoe, Senior Equity Research Analyst at Bank of America
• Kevin McCarthy, Partner at Vertical Research Partners
• Harris Fein, SVP at Wolfe Research
• Mazahir Mammadli, Analyst at Rothschild