While Albemarle's Stock Jump Captures The Spotlight, A Critical Chinese Supply Disruption Could Test The EV Battery Market

Albemarle Corp (NYSE:ALB), a leading global producer of lithium for electric vehicle batteries, shares are surging Monday afternoon following news that could significantly tighten the global lithium supply. Here’s what investors need to know.

What To Know: The rally was triggered after Chinese battery giant CATL announced a halt in operations at its lithium mine in Yichun, China. This specific mine is a major project, expected to contribute approximately 3% of the world’s total lithium output by 2025.

The shutdown has sparked fears of a supply crunch, causing a ripple effect across the sector. Investors are betting that a reduction in supply will drive up the price of lithium, which would directly benefit major producers like Albemarle.

This news comes as the lithium sector has been grappling with an oversupply problem due to slower-than-expected growth in electric vehicle demand.

The halt at the CATL mine, which occurred because its mining license expired, has already caused the most-traded lithium carbonate futures in Guangzhou to jump by the 8% daily limit. Morgan Stanley analysts noted this disruption could reduce a predicted 60,000-tonne surplus in 2025, creating “upside risk to lithium prices”.

The market’s strong reaction reflects a potential shift in market dynamics, boosting the outlook for Albemarle, which also recently reported a strong second quarter with robust guidance.

Benzinga Edge Rankings: Based on its Benzinga Edge stock rankings, Albemarle demonstrates a strong Value score of 74.33. In contrast, its scores for Momentum and Growth are weak, recorded at 32.39 and 19.50, respectively.

An analysis of the price trend indicates a positive outlook for the short and medium term, though the long-term trend is negative.

Price Action: According to data from Benzinga Pro, ALB shares are trading higher by 9.73% to $82.82 Monday afternoon. The stock has a 52-week high of $113.91 and a 52-week low of $49.43.

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How To Buy ALB Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in Albemarle’s case, it is in the Materials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

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