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Albemarle’s New Technology Increased Lithium Production in Chile

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Albemarle’s lithium expansion plans

On September 15, 2017, Albemarle (ALB) announced that it developed a new technology. The technology could help the company increase its lithium production in Chile to 125,000 metric tons of LCE (lithium carbonate equivalent) annually. If the new technology is commercially viable, Albemarle plans to build additional capacity in Chile in 2020. Currently, there are a few projects in progress. The projects are expected to increase the company’s Chilean production capacity to more than 80,000 metric tons of LCE annually. Albemarle’s Lithium and Advanced Materials segment reported revenues of $317.9 million in 2Q17—an rise of 36.20% on a year-over-year basis.

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John Mitchell, Albemarle’s President of Lithium and Advanced Materials, said, “Our efforts to improve efficiencies and sustainability in our Atacama operations are consistent with the spirit of our agreement with Corfo and the way we operate globally.We are focused on adding value to our Chilean operations while supporting the creation of a downstream industry in the country.”

Albemarle’s stock performance last week

Albemarle rose 7.90% for the week ending September 15, 2017, and closed at $127.29. The gains widened the 100-day moving average gap. Albemarle traded 12.40% above the 100-day moving average price of $113.27, which indicates the strong bullish trend in the stock. However, the 14-day relative strength index of 74 indicates that the stock has temporarily moved into an overbought position. Albemarle’s gain during the week beat analysts’ recommended target price of $125.00.

Investors can hold Albemarle indirectly by investing in the Lithium ETF (LIT), which has invested 7.80% of its holdings in Albemarle. The fund’s other holdings include FMC (FMC), Tesla Motors (TSLA), and Johnson Controls (JCI) with weights of 31.40%, 5.25%, and 3.0%, respectively, as of September 15, 2017.

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