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Shares of Albemarle Corp., the world’s largest lithium miner, fell the most ever after its profit forecast disappointed investors expecting a bigger windfall from record-high prices of the battery metal. 

The company on Wednesday raised its 2022 outlook for earnings per share to a range of $5.65 to $6.65. That’s “surprisingly low,” said Aleksey Yefremov, senior analyst of U.S. chemicals at KeyBanc Capital Markets. 

Investors “were hoping it’d be a blowout because the spot lithium prices are so high,” Yefremov said.  

Lithium, a key ingredient in batteries powering electric vehicles, started 2022 with a fresh price spike due to a series of near-term risks that are threatening shortages just as demand accelerates. The already tight market is being roiled by disruptions from plant maintenance and the Winter Olympics in China, to pandemic-related labor shortfalls in Australia. 

Yefremov expected the company’s lithium business to increase Ebitda by 89%, a number he said is conservative. That compares with company guidance of 65% to 85%.  

Albemarle boosted its lithium-demand outlook by more than 30% to 1.5 million tons by 2025, and sees demand of more than 3 million tons by 2030, Chief Executive Officer Kent Masters said during an earnings call with analysts.

“EV sales growth is accelerating as consumers become more energy conscious, governments incentivize clean energy, technology improves and EVs approach pricing parity with internal combustion vehicles,” said Masters.

With spot lithium prices soaring, Albemarle has moved part of its contract pricing to more variable-rate structures, according to lithium president Eric Norris.

The lithium miner also said it doesn’t expect to have share buyback programs in the foreseeable future.

Shares of Albemarle dropped as much as 19% on Thursday. They were down 18% to $202.68 at 12:08 p.m. in New York.

(By Yvonne Yue Li)

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