Shares of Albemarle (ALB), a leading lithium producer, plunged 5.14% in intraday trading on Thursday, despite posting a surprise profit in its second-quarter results. The steep decline comes as the company's CEO, Kent Masters, warned investors about persistent low lithium prices for the remainder of the year, overshadowing the unexpected earnings beat.

Albemarle reported an adjusted profit of 11 cents per share for Q2, surpassing analysts' expectations of a loss of 82 cents per share. However, the positive earnings news was quickly overshadowed by concerns about the broader lithium market dynamics. CEO Masters estimated that the lithium market has been in surplus since late 2022, contributing to the downward pressure on prices. This surplus situation is expected to continue in the near term, with Masters projecting that global lithium surpluses could peak as early as this year before the market potentially balances out next year.

The company's outlook reflects the challenging environment in the lithium industry, which is crucial for electric vehicle batteries and energy storage systems. While Albemarle expects volume growth toward the high end of its 0-10% target, primarily driven by operations at Wodgina and Greenbushes, along with ongoing strength from the Salar yield project in Chile, the persistent low prices are weighing heavily on investor sentiment. The stock's sharp decline indicates that market participants are more focused on the near-term pricing pressures rather than the long-term growth prospects in lithium demand, which the company still expects to double from 2024 levels by 2030.