How much of the rise is price
Albemarle reported an average realised lithium price of 19.53 dollars per kilogram of lithium carbonate equivalent in the second quarter, up 60.5 per cent from a year earlier, with sales volumes up 11 per cent over the same period. Energy Storage net sales rose 559 million dollars or 78 per cent to 1.277 billion dollars. When volume rises 11 per cent and sales rise 78 per cent, price carries the difference.[1]
A producer's realised price is not a mirror of the spot market: it reflects the mix of contracts it happens to hold, so it can lag or lead a spot move. Even so the figure carries information on its own, because it shows what actually reached the seller of the tonne. The Albemarle Energy Storage segment's adjusted EBITDA rose 504 million dollars or 229 per cent to 723.5 million dollars.[1]
The timetable of the supply response
High prices are their own cure, but how long the cure takes depends on geology, permits and construction schedules. In the Albemarle release the cure was deferred: the capital expenditure forecast was reduced to approximately 500 million dollars. At a moment when price is set at the tightest physical margin, trimming the investment that would loosen that margin pushes new supply further out.[1]
The company's own full-year range accepts the same uncertainty: net sales of 4.1 billion dollars to 7.8 billion dollars and adjusted EBITDA of 0.9 billion dollars to 4.4 billion dollars, depending on price scenarios. Rather than name a price, Albemarle leaves a range. The data that will test whether high prices are producing their cure is the capital expenditure and realised price lines in the next release; if spending stays near approximately 500 million dollars while the realised price holds above this quarter's level, the supply response will have been deferred despite that price signal.[1]