To The Moon

$Albemarle(ALB)$’s second-quarter profit surged as lithium prices recovered, showing how much earnings leverage the world’s largest lithium producer has when market conditions improve. The same sensitivity works in reverse, however, and recent price volatility means the recovery cannot yet be treated as a stable new baseline.

Albemarle reported after the August 5 market close for the quarter ended June 30. Net sales increased 31% to $1.7 billion, adjusted EBITDA rose to $858 million from $336 million and net income attributable to Albemarle reached $480 million, up from $23 million. Albemarle’s official second-quarter release provides the figures and market-price scenarios.

Energy Storage produced most of the improvement. Segment sales increased 78% to $1.28 billion, with sales volume up 11% and average realised lithium price up 61% to $19.53 per kilogram of lithium-carbonate equivalent. Adjusted EBITDA increased 229% to $724 million. Specialties also improved, reducing—but not eliminating—the company’s dependence on lithium.

The bullish thesis is that electric vehicles and grid-scale batteries create long-term lithium demand, while data-centre power needs are supporting additional storage investment. Albemarle owns large resources and has responded to the earlier downturn with cost and capital discipline. Higher volume at competitive assets can generate substantial cash if prices remain healthy.

The bearish case is the commodity cycle. Benchmark lithium prices were around $21,000 per metric ton in early August, above roughly $11,000 a year earlier but below the nearly $30,000 reached in May. Barron’s August 5 earnings analysis documents that reversal and the earnings comparison. New supply, especially from China and lower-cost regions, can push prices down faster than demand grows.

Execution risks remain. A June 9 fire delayed the Talison CGP3 ramp, and Albemarle expects 2026 sales volume of 225–235 thousand metric tons of lithium-carbonate equivalent. Earlier decisions to idle Australian processing capacity also show that not every asset is economical across the cycle.

Albemarle closed at $118.84 on August 5 after trading between $118.44 and $123.75, then rose to roughly $122 after hours. The modest after-hours gain suggests the beat was partly anticipated; lithium prices are likely to matter more than a single chart level.

ALB Weekly Chart

$Albemarle(ALB)$’s weekly chart is sitting at an important confluence zone, with price pulling back sharply from the $220 area and now testing the $106–$114 support band, which overlaps closely with the 0.382 Fibonacci retracement near $114.97 and a prior multi-year horizontal support/resistance region. That makes the current area technically significant, but the stock is still coming off a steep decline, so I would want to see stabilization here rather than assume the bottom is already in.

If ALB can hold above roughly $106, form a higher low, and reclaim $115–$120, the setup would improve and could support a recovery toward $135–$145, with the next major Fibonacci resistance near $155.46. For a trader willing to own the shares, a 30–45 DTE cash-secured put around the $95–$100 strike, ideally in the 0.10–0.20 delta range, could be a reasonable way to sell premium below the current support zone while benefiting from time decay; however, a decisive weekly close below $106, especially if followed by weakness under $100, would materially weaken the support thesis and make further put selling less attractive.

The evidence leans moderately bullish because realised prices, volume, EBITDA and cost execution improved together. The view would be invalidated by renewed lithium-price weakness, global supply outgrowing demand, project disruptions or cash generation failing to improve despite stronger reported earnings. This is personal opinion for education and is not financial advice.

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Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The views expressed are personal opinions based on publicly available information and are subject to change without notice. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. I do not guarantee the accuracy or completeness of the information presented.