Lithium prices are firming on imprived energy storage demand.
Demand from electric vehicles will inevitably improve over time.
Shares in lithium and bromine materials company Albemarle (NYSE: ALB) powered higher by as much as 12% in early morning trading in response to another spike in lithium prices and the latest analyst upgrade. It's increasingly looking like the extended period of oversupply in the lithium market is coming to an end, which could be great news for Albemarle in 2026.
The price upgrade from $152 to $167 came from a Jefferies analyst who reiterated a buy rating on the stock amid optimism over rising demand from non-electric vehicle (EV) sources, such as robotics and physical AI embedded in autonomous robots. These are solutions that need lithium batteries.
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Investors have traditionally tied demand for lithium to EVs, and while that's still pretty much the case, there's a growing need for lithium for energy storage. In fact, Albemarle's management told investors that it had "better-than-expected Energy Storage volumes" in the third quarter.
These sources of demand are strengthening lithium prices (lithium carbonate prices have risen sharply since November, and are up 37.5% over the last month in China) at a time when Albemarle has implemented cost cuts and productivity enhancements, while also strengthening its balance sheet by divesting stakes in non-core businesses.
Image source: Getty Images.
As such, it's ideally positioned to benefit from higher lithium prices. Throw in the potential for EV market expectations to have been reset following the disappointment in 2025, and a classic cyclical upturn may be on the horizon for lithium and Albemarle this year.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.