Albemarle (NYSE:ALB) reported fourth-quarter 2025 results that management said reflected double-digit volume growth, improved pricing in lithium, and ongoing cost and productivity gains, while also outlining a 2026 framework that links expected performance to three lithium price scenarios.
Q4 and full-year results
For the fourth quarter, Albemarle reported net sales of $1.4 billion, up 16% year over year, and adjusted EBITDA of $269 million, up 7%. CEO Kent Masters attributed the quarter’s performance to “strong growth in energy storage and significant cost and productivity improvements.”
CFO Neal Sheorey said Q4 performance was supported by higher volumes across all segments, with energy storage and Ketjen net sales growth of 17% and 13%, respectively. He noted adjusted EBITDA margin fell about 150 basis points year over year, driven by less favorable foreign exchange and lower specialties margins, partially offset by stronger margins in energy storage and Ketjen.
Albemarle reported a net loss of $3.87 per diluted share. Excluding charges—primarily tax-related items and a non-cash impairment tied to the expected Ketjen transaction—adjusted diluted loss per share was $0.53.
Cost actions, cash generation, and asset sales
Management emphasized actions taken since 2024 to reduce costs and capital intensity and to improve financial flexibility. Masters said Albemarle delivered about $450 million in run-rate cost and productivity improvements in 2025 and reduced capital expenditures by 65% year over year.
Sheorey highlighted cash performance, saying Albemarle ended 2025 with EBITDA-to-operating cash conversion of 117%, driven by working-capital management and receipt of a customer prepayment. He added that even after adjusting for one-time benefits, underlying cash conversion was estimated to be “at or above the top end” of the company’s long-term 60%–70% range. Free cash flow for 2025 was nearly $700 million, which management tied to cash conversion and reduced capital spending.
The company also discussed portfolio transactions. In January 2026, Albemarle closed the sale of its stake in the Eurecat joint venture and said it expects to close the sale of a controlling stake in Ketjen to KPS Capital Partners in the first quarter, “slightly ahead” of the initial schedule. Combined, the transactions are expected to generate about $660 million in pretax proceeds, with management expecting “minimal tax leakage,” and plans to use proceeds for deleveraging and other corporate purposes.
Kemerton idling and operational outlook
Albemarle said it will idle operations at its Kemerton lithium hydroxide plant in Western Australia, a move Masters described as “difficult but necessary” to preserve optionality and improve financial flexibility. The company expects the action to be accretive to adjusted EBITDA beginning in the second quarter, with no impact to sales volumes. Sheorey later flagged approximately $100 million in 2026 cash costs related to idling Kemerton Train 1 and placing it into care and maintenance.
On the call, Masters said western hard rock conversion faces structural challenges versus China, including higher costs related to reactants, tailings disposal, labor, and power. In response to analyst questions, he described a roughly $4 to $5 cost gap between China and ex-China conversion economics, adding that a restart would likely require a more durable price differentiation between western and Chinese markets. Management also said there are ongoing costs to keep Kemerton in a ready state, though it did not quantify those expenses or disclose the specific payback period.
2026 framework tied to lithium price scenarios
Albemarle introduced 2026 “outlook considerations” using three observed lithium carbonate equivalent (LCE) price cases:
- $10/kg LCE (full-year 2025 average market pricing)
- $20/kg LCE (January 2026 average pricing)
- $30/kg LCE (2021–2025 five-year average)
Sheorey said the scenarios assume flat market pricing across the year and incorporate energy storage’s current book of business, with about 40% of lithium salts volume expected to be sold through long-term agreements. Production volumes are expected to rise year over year due to growth from Greenbushes CGP3 and Salar yield improvement, offset by the impact of 2025 inventory drawdowns that boosted sales; as a result, the company expects energy storage sales volumes to be roughly flat in 2026.
Sheorey also explained that average realized prices may differ from market prices due to product mix, particularly growing spodumene sales that dilute realized price on an LCE basis. Under the $10 scenario, the company expects energy storage adjusted EBITDA margin to improve into the low 30% range from the 25% margin achieved in 2025, reflecting cost and productivity gains.
Albemarle said it is targeting an additional $100 million to $150 million in cost and productivity improvements in 2026 and aims for stable capital spending. Masters said these factors, combined with higher lithium pricing, create the “potential for meaningful, positive free cash flow at current lithium pricing,” though Sheorey noted headwinds that include $88 million of deferred revenue recognition tied to the earlier customer prepayment (benefiting EBITDA but not cash).
Demand outlook: stationary storage drives higher 2030 forecast
Management updated its lithium demand outlook to reflect stronger stationary storage growth. Masters said global lithium demand in 2025 was 1.6 million tons, up more than 30% year over year, and that demand growth outpaced supply, tightening inventories and lifting pricing by year-end. For 2026, Albemarle expects global lithium demand of 1.8 million to 2.2 million tons, representing 15% to 40% growth, driven by both stationary storage and EVs.
The company increased its estimated range for global 2030 lithium demand to 2.8 million to 3.6 million tons, up about 10% from its prior forecast, which Masters attributed to higher expected stationary storage demand.
In discussing end markets, Albemarle said EV sales rose 21% year over year in 2025, led by Europe (up 34%). The company said U.S. EV demand slowed in the fourth quarter following the removal of 30D consumer tax credits, while China remained the largest market with 60% of global EV sales and penetration around 50% in 2025.
Stationary storage shipments were up more than 80% in 2025, according to the company. Masters said China represented 40% of shipments, North America shipments increased 90%, and European shipments more than doubled. He also said demand outside the three major regions exceeded 20% of shipments and grew 120%.
During Q&A, management also addressed emerging technologies, saying solid-state batteries would remain lithium-based and could increase lithium intensity, while sodium-ion batteries could become relevant in stationary storage over time. Masters said the company’s forecast assumes sodium-ion reaches about 10% penetration early and grows to about 15% toward the end of the decade, while executives emphasized technical and scaling constraints.
About Albemarle (NYSE:ALB)
Albemarle Corporation is a leading global specialty chemicals company primarily engaged in the production and distribution of lithium, bromine, and catalysts. Its lithium segment supplies key components used in rechargeable batteries for electric vehicles, portable electronics, and grid storage systems. The company’s bromine specialty products serve a wide range of industries, including oil and gas drilling fluids, fire safety solutions, and water treatment. In its catalysts division, Albemarle provides products for petroleum refining, chemical processing and emissions control.
Founded in 1994 as a spin-off from Ethyl Corporation, Albemarle has grown through strategic acquisitions and capacity expansions to become one of the world’s foremost chemical producers.
