Stocks

Keep Albemarle Corporation On Your Watch List

Albermarle was once a high flyer, but has fallen back to earth. I missed out the on initial leg up, but the beautiful thing about the Markets is it always gives you opportunities if you pay attention to it.

Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals worldwide. Its Lithium segment offers lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and value-added lithium specialties, as well as reagents, such as butyllithium and lithium aluminum hydride for applications in lithium batteries for consumer electronics and electric vehicles…OK, I’m going to stop here.

 

The race by Tesla Inc., Samsung SDI Co. and other technology giants to secure supplies of lithium — a key ingredient in batteries for electric vehicles and smartphones — is creating a unique chance for two global mining superpowers to reap more value from their natural resources.

Australia and Chile are looking to lithium to help them escape a cycle that for decades has had the two nations digging out minerals such as iron ore and copper, only to see them refined and turned into valuable products abroad.

Almost three-quarters of the world’s lithium raw materials come from mines in Australia or briny lakes in Chile, giving them leverage with customers scrambling to tie-up supplies. The mining nations hope to bring refining and manufacturing plants that could help kickstart domestic technology industries.

Scraping a shovel into a patch of dirt near the Australian port city of Bunbury in March, an executive for U.S.-based lithium leader Albemarle Corp. heralded a A$1 billion ($690 million) plan to build the world’s biggest processing plant of its type.

The supply of lithium-ion batteries will need to jump more than 10-fold by 2030, BloombergNEF forecasts, with electric vehicles to account for more than 70 percent of that demand.

Source

On the monthly chart, price is near a major long term support/resistance line.

But I’m holding out because I personally think price will decline further due to the global economic slowdown.  I’m targeting another 20+ point decline to the $40 level.  However, I think the opportunity to go long will be a break and a close of the down trendline.  This may not happen for a couple of years, but now you have the same signals I will be looking at moving forward. 

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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