Lithium miner Albemarle’s share price had another very bad day, but unlike when the stock makes big moves, there was no clear main driver behind the decline.
This stock was the second worst performer of them all.
S&P500
on tuesday. Expeditors International of Washington stock only
,
It fell 6.9% following the logistics company’s quarterly profit, but it fell further.
Albemarle stock fell 6.3% to close at $114.82 per share.On the other hand, the S&P500 and
Nasdaq Composite
They fell by 0.6% and 0.9%, respectively.
The market-wide losses deserve some blame, but they don’t explain the entire decline. News about electric cars that use lithium-ion batteries was also part of the conversation.
Ford Motor Co. announced Tuesday that it is reducing the price of its all-electric 2023 Mustang Mach-E. Prices for 2024 models are unaffected, but the 2023 price reductions indicate there is still excess inventory to be disposed of.tesla stock
,
The largest EV company fell 3.1%.
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Ford did not immediately respond to a request for comment on how much inventory it has left in stock for 2023, but an oversupply of vehicles means a long period of low prices. And falling prices have squeezed his EV margins for more than a year.
Tesla’s operating margin was about 8% in the fourth quarter, down from about 16% a year earlier. Wall Street expects operating margins to be around 9% in the first quarter of 2024. To achieve this number, price stability is essential.
Of course, Ford doesn’t just sell EVs, so its stock is less susceptible to EV price drops than Tesla’s. Ford shares fell 0.4% on Tuesday.
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Another reason for Albemarle’s stock decline appears to be product pricing. Commodity producer stocks often trade in conjunction with commodity prices.
Benchmark lithium prices fell 2% on Tuesday to about $13,300 a tonne. Through midday trading, the price has fallen about 77% in the last 12 months. Albemarle’s stock price fell about 53% over the same period.
Finally, there is post-earnings volatility. Albemarle’s stock price was around $114 per share before the company released its fourth-quarter numbers last week, which included several scenarios for lithium prices. The stock ended the week above $122, but lost that ground on Tuesday.
Email Al Root at allen.root@dowjones.com.
