Albemarle (ALB) shares soared over 7% on Thursday, ranking among the top gainers in the S&P 500 index. The rally followed a jump in global lithium prices, sparked by reports that a major Chinese lithium producer, Zangge Mining, had suspended operations, alleviating worries about a potential oversupply in the market.
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Albemarle is known for its lithium production and operates globally with major lithium mining projects in the U.S., Chile, and Australia. Like many of its industry peers, Albemarle had faced challenges due to a lithium oversupply, largely driven by overproduction in China. As a result, the recent spike in lithium prices brought much-needed relief for Albemarle, boosting investor sentiment and offering a potential break from the prolonged pricing pressure. Year-to-date, ALB stock has declined by 12%.
Notably, Albemarle is scheduled to release its second-quarter earnings after markets close on July 30.
Lithium Stocks Rally Across the Board
According to market reports, China’s Zangge Mining was ordered by government authorities to stop unauthorized lithium mining and comply with official regulations. Zangge, which is majority-owned by Zijin Mining (ZIJMF), stated that there’s no set timeline for resuming production, adding further uncertainty to an already supply-constrained market. Nonetheless, Zangge is reportedly preparing the necessary documents to seek approval to restart production.
The news triggered a sector-wide rally, pushing lithium futures to a three-month high. Notably, Sigma Lithium (SGML) surged 8.66%, while Sociedad Quimica y Minera (SQM) jumped 7.45%.
Is ALB a Good Stock to Buy?
On TipRanks, ALB stock has a Hold consensus rating based on six Buys, nine Holds, and four Sells assigned in the last three months. Also, the average Albemarle stock price target of $72.50 implies a downside of over 4% from current levels.
