Albemarle Growth and Economic Outlook
Continued Growth in a
Turbulent Macro Environment
Economic Conditions Vary by Segment
2023E Forecast Cost
Breakdown:
Royalties
Progressive commissions paid in
Chile, increases with price to
customer
For every $1 over $10/kg LCE,
ALB pays $0.40 to CORFO
Energy/ Freight
Materials/Services
Nearly 20% is company-owned spodumene
Other major inputs include BPA, chlorine,
molybdenum, caustic soda, soda ash
Other services includes warehousing
Royalties
15%
Includes natural gas and
Energy/Freight
utilities
5%
Notable increases in
freight, continued supply
chain issues
Labor
Labor (incl GSA)
15%
ā
Increasing headcount to
prepare for long-term
growth, plus inflation
impacts
Other
Depreciation
Other standard cost
components
Other
10%
Materials /
Services
55%
Energy Storage
Expect continued secular growth related to the shift to clean
transportation supported by OEM EV investments and public policy
Key economic indicators include global EV production
Battery grade demand lags EV production ~1 to 2 quarters
Contribution margin ~60%
Specialties
Diverse end markets - ability to divert product to highest margin
operations; demand typically rebounds quickly post recession
Key economic indicators include consumer confidence, total
automotive production, building and construction
~1 to 3 quarter lag in supply chain
Contribution margin ~65%
Ketjen
Demand relatively resilient in previous recessions; lower oil prices have
historically led to higher demand and lower raw materials costs
Key economic indicators include transportation fuel demand
FCC demand changes with fuel consumption with little to no lag
HPC demand lags multiple quarters as refineries push out turnarounds
Contribution margin ~40%
Albemarle
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