Jotting down some ideas for when Biden signs off
First up: ALB
From Wikipedia:
"Albemarle Corporation is a specialty chemicals manufacturing company based in Charlotte, North Carolina. It operates 3 divisions: lithium (36.6% of 2020 revenues), bromine specialties (30.8% of 2020 revenues) and catalysts (25.5% of 2020 revenues).
As of 2020, Albemarle was the largest provider of lithium for electric vehicle batteries."
Some of the Democrats wrote up a memo to Biden specifying what they want done with the EO. I don’t think most of it will go anywhere but I believe that there is significant energy around the parts that pertain to EV production:
“Ensure the federal government leverages its vast purchasing power to accelerate
homegrown clean energy technologies that cut costs for American families by
developing strong rules for implementing the Executive Order on Catalyzing
Clean Energy Industries and Jobs Through Federal Sustainability. Regulations
should include equity, labor, and environmental standards.”
Biden spoke yesterday indicating that at least EV materials will be included in the EO:
President Joe Biden said Thursday he will invoke the Defense Production Act to boost domestic mining and production of key minerals used in electric vehicles
“We need to end our long-term reliance on China and other countries to supply the inputs” used in U.S. electric vehicles, Biden said.
“Right now, our supply chains for raw materials are coming from Australia, South Africa, South America, Russia and China. Most of the (refining) of these raw materials is being done in China,” said Carla Bailo, CEO for Center for Automotive Research in Ann Arbor. “Because of political strife, we have to remove some of that dependence on other countries.”
What makes ALB special is that they own the only Lithium mine on US soil. While the EO is likely to be more about manufacturing/processing (which is a large portion of their business) than raw resource acquisition, this gives them a bit of (local) vertical integration a la $CLF making them appealing for tender distribution.
The language Biden and co. are using seems to imply it’s not just about using existing legislation for the progressive agenda but that there is actually a legitimate national security concern. I think having the technologies and processes for the extraction of lithium under Federal guidelines - and the only operating physical location - will position ALB to receive a significant share of business from the government for lithium supply.
ALB has been on a run-up the last couple weeks presumably based on talk of the EO but it is still down from Feb and earlier.
It also looks like they clapped a couple of earnings in the last year. Note though that their next earnings is on 05/04/2022 and I suspect the EO will be signed before then.
General financials from SA
It’s worth noting though that ALB does have significant manufacturing and processing assets in China which is obviously a little bit bearish
CHARLOTTE, N.C., Jan. 3, 2017 Albemarle Corporation, a premier specialty chemicals company and leader in the production of lithium and lithium derivatives, announced today that it has successfully completed the acquisition of the Jiangxi Jiangli New Materials Science and Technology Co. Ltd. (“Jiangli New Materials”) lithium business for a purchase price of approximately $145 million. The transaction includes manufacturing assets and supporting business functions located in both Jiangxi and Sichuan, China focused on the production of battery-grade lithium hydroxide and lithium carbonate.
ALB has reasonable OI for 04/14 around the ATM strikes. It’s fairly sparse going further out for now.
The US government released a memo in June last year that they are likely going to refer to when it comes to the distribution of contracts & subsidies. It explains their perspective on the processes of lithium production and may hint at which tickers will benefit from the “vast purchasing power”.
Will update this thread when I find other potential plays PLZ ASSIST