Albemarle’s agreement

On June 20, Albemarle (ALB) entered into heads of agreement with Sinopec Catalyst Co. Ltd. and Sinopec Fushun Research Institute of Petroleum and Petrochemicals in the field of hydrocracking. The cooperation among these entities is on a non-exclusive basis, and they expect to supply hydrocracking pre-treat and hydrocracking catalysts and expertise.

Albemarle Signs Heads of Agreement for Hydrocracking

ALB’s new venture is expected to help its Catalyst segment to grow in the long run. In the first quarter, the Catalysts segment reported revenues of $260.7 million, implying YoY (year-over-year) growth of 2.8%.

Silvio Ghyoot, Albemarle’s president of its Catalysts segment, said, “We are pleased to strengthen our position in hydrocracking by this Heads of Agreement with SCC and FRIPP.”

Ghyoot continued, “We look forward to developing this Heads of Agreement further towards a productive business cooperation from which a number of customers around the globe will benefit.”

Stock update

This positive development helped Albemarle (ALB) stock rise 0.1%, and it closed at $93.46 for the week ended June 22. The Global X Lithium ETF (LIT), which holds 5.1% of its portfolio in Albemarle, underperformed ALB with a decline of 2.5% for the week.

Although its stock price increased, Albemarle still traded 5.7% below its 100-day moving average price of $99.16. ALB stock has been declining since the beginning of 2018.

On a year-to-date basis, ALB has declined 26.9%. However, analysts have given Albemarle a target price of $128.50, which implies a return potential of 37.0% over its June 22 price of $93.46. ALB’s 14-day RSI (relative strength index) of 43 indicates that the stock is neither overbought nor oversold.

LIT also provides exposure to FMC (FMC), Tesla (TSLA), and Johnson Controls (JCI), which had weights of 27.4%, 4.7%, and 2.4%, respectively, on June 22.

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