Albemarle Corporation (NYSE:ALB) has seen a sharp rebound in its share price, climbing nearly 50% over the past three months — including a 30% jump in just the past month. This momentum has coincided with a resurgence in Chinese lithium spot and futures prices, sparking renewed investor interest in the chemical producer.
According to Bank of America, part of the surge in Albemarle’s stock may be explained by a short squeeze, as traders rushed to cover bearish bets amid the rising tide. Additionally, optimistic developments out of China regarding supply conditions have helped boost sentiment around the stock.
Bank of America has reiterated its Buy rating on Albemarle, although it also notes that maintaining the current positive momentum could prove challenging. The firm’s lithium market model projects a substantial supply surplus this year, which could hinder sustained price gains.
“Chinese lithium inventories remain at all-time highs,” Bank of America said, adding that this oversupply “could further delay a structural price recovery in the market.” The bank expects lithium prices to remain relatively flat over the coming quarters until fundamentals start to realign.
Despite ongoing concerns over potential demand softness and future supply adjustments, the firm remains optimistic about Albemarle’s longer-term outlook. It views the current conditions as marking the bottom of the lithium cycle, with strong structural demand expected to support the company’s growth going forward.
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