Also: Lithium Argentina (LAR) -11.6%, Sigma Lithium (SGML) -11.3%, Mineral Resources (MALRY) -10.5%, SQM (SQM) -9.1%, Lithium Americas (LAC) -6.8%, Standard Lithium (SLI) -4.8%.

The most-active lithium carbonate contract on the Guangzhou Futures Exchange ​fell ~13% to close daytime trading ​at 150,860 yuan/metric ton, according to Reuters.

The decline ​followed reports of softer February sales from ​several Chinese electric vehicle manufacturers, including industry leader BYD, whose EV sales plunged more than 40% Y/Y during the month.

Lithium prices had been rallying recently, supported by Zimbabwe’s suspension of lithium concentrate ⁠and ​raw mineral exports, before ​the plunge in China.

ETF: (LIT), (BATT)

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Also moving higher: Sigma Lithium (SGML) +22.4%, SQM (SQM) +4.9%, Lithium Argentina (LAR) +4.2%, Lithium Americas (LAC) +3.6%, Standard Lithium (SLI) +2.2%.

The export ban, which is intended to compel mining companies to refine minerals in the country, is effective immediately and will remain in place until further notice, Zimbabwe’s mining minister said.

Most of the country’s lithium concentrate is exported to China for further processing into battery-grade materials, but the government has been pressing mining firms to process more of the minerals in the country as it seeks greater benefits from the global shift to cleaner sources of energy.

Zimbabwe has some of the largest lithium reserves in Africa and is among the top global producers, with resources estimated at 126M tons, according to official data.

The country’s ban on lithium concentrates had been expected to come into effect in 2027 as part of a push for more local processing.

ETFs: (LIT), (BATT)

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BofA analysts led by Rock Hoffman believe lithium pricing has moved beyond a purely headline-driven rebound and is increasingly supported by improving supply-demand fundamentals, noting Chinese permitting reform is keeping higher-cost lepidolite offline for longer, tightening marginal supply, and Chinese battery manufacturers are producing 2x new installations, supporting lithium demand.

Albemarle (ALB) has executed through the lithium price downturn, delivering meaningful cost
savings that enhance earnings leverage as the price improves, Hoffman said, expecting improved earnings visibility and attractive upside with disciplined capital allocation and a portfolio positioned to benefit from sustained EV and ESS demand.

Even with spot pricing above $20/kg sooner than expected, Hoffman views pricing as likely to remain constructive through the year, albeit volatile, and current pricing supports profitable production across most of Albemarle’s (ALB) existing and planned portfolio ex-Kemerton, improving confidence in earnings visibility.

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Quarter to date, XLB has climbed roughly 18%, while SPY has slipped 0.1%.

As of early 2026, heightened trade protectionism, led by U.S. tariff threats, has driven safe-haven demand while increasing demand uncertainty across other industries within the materials sector.

In this week’s earnings recap, out of the seven companies that reported, two surpassed profit estimates and five companies fell short of expectations. On the revenue side, six companies exceeded revenue estimates, while one company missed.

Below are the latest quarterly reports from five industry giants:

Shares of DuPont de Nemours (DD) rose on Tuesday after the industrial materials company reported fourth-quarter results that exceeded Wall Street expectations and issued upbeat guidance for 2026.

Albemarle (ALB) fell post-market Wednesday after reporting a larger-than-expected Q4 adjusted loss and saying it will idle a major Australian lithium processing plant, as the company continues to face weak prices for the battery metal.

IFF (IFF) outlined a $10.5B–$10.8B 2026 sales forecast amid portfolio optimization and innovation focus. Full-year 2026 sales are expected to be in the range of $10.5 billion to $10.8 billion, and full-year 2026 adjusted operating EBITDA is expected to be in the range of $2.05 billion to $2.15 billion. Full-year guidance includes three months of our Soy Crush, Concentrates, and Lecithin business results, with the divestiture assumed to close on March 31, 2026.

Martin Marietta (MLM) projected a $2.49B adjusted EBITDA target for 2026 while advancing the SOAR 2030 strategy. Fourth-quarter aggregate shipments increased 2% to 48.9 million tons, reflecting strong infrastructure and non-residential construction activity, favorable weather across the company’s footprint, and contributions from acquisitions. The average selling price increased 5.3 percent to $23.11 per ton.

Ecolab (ECL) outlined 12%–15% EPS growth for 2026 as growth engines accelerate and Ovivo boosts the portfolio. This outlook includes an approximate $0.13 per share impact from non‑cash amortization related to the acquisition of Ovivo Electronics. For Q1, expect adjusted diluted EPS in the $1.67 to $1.73 range vs. $1.69 consensus, +11% to 15%.

For the next week, some notable companies that will report are CF Industries Holdings (CF), Newmont (NEM), and Vulcan Materials (VMC).

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Management View

• CEO Jerry Masters stated that “for the fourth quarter, we reported net sales of $1.4 billion, up 16% year-over-year with double-digit volume growth. We also delivered adjusted EBITDA of $269 million, up 7% year-over-year, reflecting strong growth in energy storage and significant cost and productivity improvements.” Masters highlighted that Albemarle is updating its lithium demand outlook, increasing the estimated range for global 2030 lithium demand by 10% versus the previous forecast, and expects “meaningful positive free cash flow at current lithium pricing.”
• Masters announced the decision to idle operations at the Kemerton lithium hydroxide plant, stating, “recent lithium price improvements alone are not enough to offset the challenges facing Western hard-rock lithium conversion operations. This action is expected to be accretive to adjusted EBITDA beginning in the second quarter with no impact to sales volumes.”
• CFO Neal Sheorey reported, “Net sales for the quarter of $1.4 billion increased from the prior year, primarily driven by higher volumes across all segments, particularly energy storage and Ketjen, which grew 17% and 13%, respectively. Adjusted EBITDA for the fourth quarter was $269 million, up 7% versus the prior year. This improvement was driven by higher lithium market pricing and increased Ketjen sales volumes.” Sheorey also confirmed a net loss of ($3.87) per diluted share, with an adjusted diluted loss per share of ($0.53) after excluding charges.

Outlook

• Sheorey introduced the 2026 outlook with scenario-based guidance, noting three lithium market price cases: “full year 2025 average market pricing of about $10 per kilogram lithium carbonate equivalent, or LCE; January 2026 average pricing of about $20 per kilogram LCE; and the 2021 to 2025 5-year average price of about $30 per kilogram LCE.” All scenarios assume flat market pricing and roughly flat Energy Storage sales volumes year-over-year.
• Masters shared that Albemarle is “targeting additional cost and productivity improvements of $100 million to $150 million and stable capital spending in 2026.”
• The company expects “Energy Storage adjusted EBITDA margin to improve year-over-year into the low 30% range from the 25% margin achieved in 2025,” even if lithium market pricing is flat.
• The 2026 global lithium demand expectation is set at “1.8 million to 2.2 million tons, up 15% to 40% year-over-year, driven by Stationary Storage and electric vehicle demand growth.”

Financial Results

• Sheorey reported, “We ended 2025 with an EBITDA to operating cash conversion of 117%, driven by our actions to manage working capital and receipt of a customer prepayment in January of last year. Even after adjusting for the onetime benefits, we still estimate our underlying 2025 cash conversion to be at or above the top end of our long-term range of 60% to 70%.”
• The company delivered “significant positive free cash flow of nearly $700 million due to our solid cash conversion and our rightsized capital expenditures, which declined 65% year-over-year.”
• Sheorey highlighted that Ketjen delivered “solid year-over-year adjusted EBITDA growth of 39% due primarily to higher sales volumes,” while Specialties EBITDA decreased due to margin compression in Lithium Specialties.

Q&A

• David Begleiter, Deutsche Bank: Asked about lithium volume growth beyond 2027. Masters responded, “we probably grew a little faster than we’d anticipated, kind of why we’re running into a flat spot this year…we will still continue that growth profile after ’27, and we’ll have to start investing once we see how the market looks for that.”
• Jeffrey Zekauskas, JPMorgan: Queried cost differences between Kemerton and Chinese conversion assets. Masters explained, “the cost structure between China and, say, Western supply, but particularly Western Australia, I mean it’s across the industry…Labor is higher power. So there is a gap there between China and the West. In Australia, it’s probably $4 or $5, something like that.”
• Laurence Alexander, Jefferies: Asked about contract structure differences between Stationary Storage and automotive. Masters stated, “the material goes through the same supply chain…Probably the biggest difference is, by definition, all the fixed storage is carbonate…hydroxide tends to be — go to the west.”
• Joel Jackson, BMO: Questioned Energy Storage EBITDA margins at current spot prices. Masters clarified, “you have to consider the lag on the way our contracts work…once we get that, that should be the case.”

Sentiment Analysis

• Analysts pressed on volume outlook, cost structure in Western operations, and contract differences, reflecting a slightly cautious tone with focus on profitability and market dynamics.
• Management maintained a confident tone in prepared remarks, emphasizing operational improvements, but responses in Q&A showed caution and clarity around cost pressures, notably with phrases like “we probably will be a bit more conservative” and “it’s probably too early to say.”
• Compared to the previous quarter, the current tone is more focused on managing near-term headwinds, particularly cost and margin pressures, while still expressing confidence in long-term demand and competitive positioning.

Quarter-over-Quarter Comparison

• The previous quarter emphasized strong free cash flow guidance ($300 million to $400 million) and robust energy storage volume growth. The current quarter highlights nearly $700 million in free cash flow and a 65% year-over-year CapEx reduction.
• Strategic focus shifted from cost controls and productivity gains to active portfolio optimization, including the Ketjen and Eurecat transactions, and the idling of Kemerton.
• Analyst questions this quarter centered more on the sustainability of cost reductions, market price scenarios, and operational flexibility in response to market volatility, compared with prior focus on growth and capacity ramp.
• Management’s tone has become more reserved about immediate growth, stressing discipline in capital allocation, and readiness to pivot if market conditions improve.

Risks and Concerns

• Masters noted that “recent lithium price improvements alone are not enough to offset the challenges facing Western hard-rock lithium conversion operations.”
• Sheorey described headwinds for cash metrics in 2026, including “recognizing $88 million in deferred revenue related to the customer prepayment” and “approximately $100 million in cash costs related to idling Kemerton Train 1.”
• Ongoing margin compression in Lithium Specialties was flagged, along with exposure to lower demand in oil and gas and elastomers markets.
• Analysts raised concerns about cost competitiveness, with Masters highlighting a $4 to $5 per kilogram cost gap between Western and Chinese conversion.

Final Takeaway

Albemarle’s fourth quarter and full-year 2025 results reflect disciplined cost and productivity improvements, a streamlined portfolio, and strong free cash flow generation. Management is focused on navigating margin pressures and Western cost challenges, while maintaining confidence in long-term lithium demand growth led by Stationary Storage and EVs. The company targets additional cost gains and flat CapEx in 2026, with portfolio actions expected to further enhance financial flexibility. Albemarle expects the impact of these measures to drive year-over-year margin improvements and sustain its competitive position as global lithium markets expand.

Read the full Earnings Call Transcript

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Albemarle (ALB) said it will idle the last active train at its Kemerton lithium hydroxide processing plant in Western Australia and place it into care and maintenance effective immediately, and canceled plans to add two new trains; the company closed another train at the site last year.

The Kemerton site processes spodumene, a type of hard rock containing lithium, from the Greenbushes mine, one of the world’s best spodumene resources; Albemarle (ALB) co-owns the mine with China’s Tianqi Lithium.

“Unfortunately, recent lithium price improvements alone are not enough to offset the challenges facing Western hard-rock lithium conversion operations,” Albemarle (ALB) Chairman and CEO Kent Masters said.

Albemarle (ALB) said its mining interests in Australia, including its holdings in Greenbushes and Wodgina and exploration interests in Western Australia, are not affected by the Kemerton decision, as they remain core components of the company’s strategy.

For Q4, Albemarle (ALB) swung to a net loss of $455.9M, or $3.87/share, from a net profit of $33.6M, or $0.29/share, in the year-earlier quarter; on an adjusted basis, including charges tied to the sale of its Ketjen refining catalyst business, the company lost $0.53/share.

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