Albemarle projects robust lithium demand growth in 2026, with a forecast range of 15% to 40%, amid geopolitical uncertainties. The company's outlook indicates resilience driven by diversification into energy storage and electric vehicle markets.
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What is Albemarle's forecast for lithium demand growth in 2026 and how might geopolitical factors impact this forecast?
Albemarle says global lithium demand is tracking in line with its forecast, and that for 2026 it is forecasting lithium consumption growth of 15% to 40%. 1 In support of that range, it notes that “so far this year, lithium consumption is up 37%” (implying it is near the upper end of the 2026 growth range). 1
Importantly, Albemarle also states it is “holding our outlook steady due in part to geopolitical uncertainties.” 1
Management frames two plausible impacts of the Middle East situation on lithium demand: 1
Crucially, Albemarle says either outcome still “falls within our 2026 forecast range.” 1 This indicates Albemarle views geopolitics more as a swing factor around timing/supply-chain conditions rather than a reason to materially widen the forecast. 1
Albemarle states that its early estimates suggest lithium demand will be relatively resilient to the situation in the Middle East, and it points to two key diversifying end markets: energy storage and electric vehicles. 1
This “resilience” narrative is consistent with what Albemarle highlights on market fundamentals:
While geopolitical uncertainties affect operations and costs, Albemarle’s guidance discussion emphasizes that it is maintaining scenarios for full-year lithium market growth despite cost impacts from the Middle East. 4 For example, it notes supply chain disruptions related to the Middle East can affect costs (e.g., expected EBITDA margin decline sequentially due to higher costs and spodumene inventory timing), even though the company is keeping its volume/energy storage outlook steady. 4
This supports the interpretation that, in Albemarle’s view, geopolitics may pressure margin and operational conditions, but the demand growth trajectory for 2026 remains largely intact within the 15%–40% range. 14
Albemarle also links demand conditions to regional policy and incentives—factors that can be sensitive to geopolitical instability (e.g., energy security and grid reliability themes). For instance, it says EV volume weakness in China was tied to seasonality and subsidy changes, with policy shifting toward premium segments and increasing average battery size, which in turn increased demand for lithium hydroxide. 5 It also describes broader EV penetration growth outside China (Brazil, India, Australia collectively up 74% year-over-year). 5
Separately, management emphasizes energy security and grid resiliency as major drivers of energy storage demand, noting that this is driven by global concerns broadly (not “just” the Middle East crisis). 6 That matters because geopolitical events can alter energy security priorities, which can influence energy storage-related lithium demand. 6
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