SQM - Albemarle's Got an Edge Over SQM Today
Albemarle's (NYSE: ALB) stock has fallen roughly 30% over the past 12 months. Sociedad Química y Minera de Chile's (NYSE: SQM) shares are down a little more, having slid 36%. The big story is that investors that fell in love with lithium stocks a few years ago have now fallen out of love with them. That happens with story stocks all the time on Wall Street, especially when the near-term outlook shifts negative, as it has with lithium, even though the long-term outlook remains largely unchanged. But what's interesting when comparing Albemarle and SQM, as the Chilean company is usually called, isn't the price of their respective stocks, but the performance of their underlying businesses.
Lithium production has ramped up as producers seek to build more capacity to meet what is expected to be huge long-term demand. To put some numbers on the demand outlook, Albemarle is projecting demand to increase at an incredible 21% annualized rate between 2018 and 2025. The biggest driver of that demand will be electric vehicles, with annualized growth of 36%. However, notable demand growth is also projected in the electric power space, where grid-level storage is expected to increase by 29% a year over that span (albeit from a much smaller base).
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