The return of the lithium king! America's Albemarle Corporation (ALB.US) follows the sharp rise in lithium prices, with Q1 profits surpassing expectations.

In the first quarter of 2026, the world's largest lithium producer, Albemarle Corporation (ALB.US) of the United States, announced with a report that far exceeded market expectations, declaring that the lithium industry is officially emerging from its low point. The chemical giant, headquartered in Charlotte, North Carolina, announced that its first-quarter net profit reached $319.1 million, or $2.34 per share, compared to $49.3 million in the same period last year, which was breakeven per share. Excluding one-time items, adjusted earnings per share reached $2.95, well above the analyst average expectation of $1.09 reported by LSEG. Revenue performance was also strong. Net sales in the first quarter increased by 33% year-on-year to $1.43 billion, slightly higher than the analyst average expectations. Adjusted EBITDA soared to $663.8 million, exceeding the expected $468.2 million, and more than doubled compared to the same period last year, with a year-on-year increase of approximately 148%. Looking at the business segments, the lithium business remains the core engine of performance. The Energy Storage business (i.e. the lithium business sector) had a net sales of $891 million, a 70% increase year-on-year, with a 51% price increase and a 14% sales volume growth. The sector's adjusted EBITDA surged by 196% to $551 million. The Specialty Chemicals business also showed steady growth, with net sales increasing by 12% to $358 million, and adjusted EBITDA rising by 30% to $76 million. The capital markets quickly responded positively. After the performance announcement, Albemarle Corporation's stock price rose by about 9% in after-hours trading on Wednesday. Over the past 12 months, the stock has accumulated an approximately 235% increase, reflecting investors' strong bullish sentiment towards lithium and energy storage demand. At the same time, Chinese lithium mining giants collectively presented impressive first-quarter reports. Tianqi Lithium Corporation's net profit attributable to shareholders of listed companies was approximately RMB 1.876 billion, an increase of approximately 16.99 times year-on-year. Ganfeng Lithium Group's net profit attributable to shareholders of listed companies was approximately RMB 1.837 billion, turning a loss year-on-year. According to data from Mysteel on 20 key listed lithium enterprises, the total net profit in the first quarter reached RMB 16.147 billion, with 18 companies achieving profitability, and 5 companies with year-on-year growth rates exceeding 1000%. This marks a comprehensive performance recovery for the entire lithium battery industry chain, from upstream lithium salt to midstream materials and downstream batteries. Lithium prices surge: "Triple supply storm" on the supply side The fundamental drive behind Albemarle Corporation's outstanding performance is that lithium prices have surged to their highest levels in over two years. With the industry dynamics, the current market prices for battery-grade lithium carbonate in China are around RMB 187,500 per ton, and for lithium hydroxide it is around RMB 174,500 per ton. International lithium carbonate prices remain near their highs for the year. Lithium carbonate futures have risen by 58% since the beginning of the year. The supply side contraction is the core driver of this round of lithium price increases, with three major events this year having a cumulative effect: Firstly, Zimbabwe implemented a ban on lithium concentrate exports at the end of February. In 2025, 19% of China's lithium concentrate imports came from Zimbabwe, and it is estimated that Zimbabwe's lithium resource production will account for 12% of the global total in 2026. This export suspension directly led to a decrease in global supply of lithium concentrate by approximately 12,000 to 14,000 tons of lithium carbonate equivalent per month, about 10% of the global monthly output. Although local Chinese mines obtained six-month export quotas in mid-April, due to logistical delays, the large-scale arrivals were postponed to July, meaning that domestic raw material supply will remain tight in May and June. Secondly, there has been a contraction in domestic mining supply in China. Four lithium mica mines in the Yichun area of Jiangxi province have gradually entered the phase of suspension for license renewal, and the resumption of production at the top mines is uncertain. The continued suspension of production at the Jianxiawo mine under Contemporary Amperex Technology has also exacerbated concerns on the supply side. Thirdly, lithium carbonate inventories continue to be depleted. As of the week ending on April 30th, social total lithium carbonate inventories have been decreasing for four consecutive weeks, officially entering a destocking phase. The inventory-to-sales ratio has further decreased, providing strong support for the high lithium prices. On the demand side, there has been a structural explosion as well, not just in electric vehicles but also in AI Data center energy demand has become a major growth driver. Sinolink's report predicts that by 2026, global energy storage new installations will reach 438GWh, a 62% year-on-year increase. The growth driver has shifted from the previous single focus on new energy consumption to a triple drive of "AI computing power infrastructure + essential energy transformation + grid congestion" in 2026. In the first two months of 2026, China saw new energy storage installations of 9.51GW/24.18GWh, up by 472% year-on-year, as emerging applications such as AI data centers witness rapid growth. It is predicted that by 2030, global lithium battery shipments for AI data center energy storage will exceed 300GWh, 20 times the level in 2025. Additionally, the escalation of tensions between the US and Iran at the end of February pushed global oil prices higher, which also became an unexpected catalyst for lithium demand. Brent crude oil prices spiked to as high as $140 per barrel. The sharp rise in oil prices significantly reinforced the cost advantage of electric vehicles over gasoline vehicles. A survey by Carwow showed that 48% of respondents said they would consider buying electric or hybrid vehicles as a result. Traffic related to electric vehicles on German car platforms surged by 40%. UBS Group AG referred to this as the "white oil" effect, pointing out that supply-driven energy shocks have historically led to lasting changes in policy, consumption behavior, and industry strategies. Internal optimization: Cost discipline and financial recovery in tandem Despite the significant positive impact of lithium price recovery, Albemarle Corporation's management has not relaxed its cost control. CEO Kent Masters emphasized in a statement: "We are focused on matters within our control, including operational excellence, cost and productivity controls, and cash flow." During the first quarter, the company achieved a $40 million improvement in costs and productivity, and is expected to achieve cost savings of $100 million to $150 million for the full year. In terms of capital expenditure, the company expects it to remain approximately the same as in 2025, at around $550 million to $600 million. There have been significant actions taken towards financial recovery. In the first quarter, Albemarle Corporation repaid $1.3 billion in debt, lowering its interest expense guidance for 2026 to $120 million to $140 million, significantly reducing interest costs and improving financial flexibility. The company generated a total of $346 million in cash flow from operating activities, with free cash flow of approximately $248 million, indicating that the company has maintained a healthy cash generation capability while profits recover. Albemarle Corporation has maintained its overall business outlook based on three lithium price scenarios: the adjusted EBITDA is expected to be $900 million to $1 billion in a low-price scenario, and $4.2 billion to $4.4 billion in a high-price scenario, providing investors with clear performance flexibility expectations. After experiencing years of oversupply and low prices during the "darkest moments," the lithium industry is now entering a new phase of prosperity. Albemarle Corporation had also closed a large processing plant in Australia in February due to weakening prices, and the executives indicated that they will not change their strategy. The company also revealed that lithium production will increase this year, but due to customers depleting their inventory in 2025, sales volume is expected to remain stable - indicating that Albemarle Corporation has chosen a cautious strategy of "price over volume" to prioritize the recovery of profit margins.