Albemarle Corp ALB
Q3 2010 Earnings Call Transcript

Operator: David Begleiter, Deutsche Bank.

David Begleiter - Deutsche Bank: Mark, can you help quantify the impact of rare earths on FCC margins and profitability in Q4 and perhaps 2011?

Mark C. Rohr - Chairman and CEO: We have worked hard with our customers to see that they understand the situation in rare earths. We have worked hard to secure the volumes and materials. We need to meet our customers' needs, and to be honest we have lived through this without any disruption to our customers. The margins have not been impacted by this because of the work we have done without customers, as John noted earlier. So, we have not seen an impact with it. It could have been a pretty tough impact, but we've not seen it. As we look in 2011, our view is that this is a temporary situation. We see signs that China is going to work their way out of this. We also have activities in the U.S. underway, as you know, in other parts of the world to provide new sources of rare earths. So, I think we've got it under control, David. I wouldn't expect it is going to disrupt our business model going forward.

David Begleiter - Deutsche Bank: And just on bromine next year, given the tightness globally. Any reason we wouldn't see another substantial price increase in bromine and its derivatives in 2011?

Mark C. Rohr - Chairman and CEO: John, you want to answer that.

John M. Steitz - EVP and COO: Look, first, we're doing what we can to debottleneck our plans to make sure we take care of our customers. Bromine is very tight, and I think it offers tremendous value. We'll continue to drive that value as the market opportunities are presented. I would say, I think we're beginning to see a lot higher levels of inflationary trends and we are seeing some indications of higher prices on some of the derivative raw materials like BPA is at record levels today, benzene is heading up and some of the, believe it or not, the derivatives of natural gas, ethane at the point we're seeing heading back up to. So, we got to work hard to stay ahead of that curve as well.

David Begleiter - Deutsche Bank: Just last on, how much capacity are you adding and what's in bromine and what's your capacity plan post 2011?

John M. Steitz - EVP and COO: Well, it's in the mid double digit range in terms of volume David, but we've been running very tight. I think the important point there is in some of the derivatives, we're seeing some really great opportunities to continue to broaden the use of bromine in a wide range of markets. We're getting very excited about that. So, we want to stay ahead of the supply curve, if we can.

Operator: Jeff Zekauskas, JP Morgan

Olga Guteneva - JPMorgan: This is actually Olga Guteneva sitting here for Jeff. A quick question on catalyst, so year-over-year pricing was not that strong, it was just less than, I don't know, a little bit higher than flat. So, what was the sequential price change in catalysts?

John M. Steitz - EVP and COO: Well, most of the sequential pricing in catalyst is related to just metals changes, but HPC was overall up a little bit year-over-year, just down a hair sequentially on price. FCC was flat. We got a little bit of help on Polyolefin catalyst on pricing. But this is mostly mix related in catalysts, Olga.

Olga Guteneva - JPMorgan: So, this is this second quarter of very high margins, and I think last time you said that this is probably not really sustainable, but you did it again. So should we think about this level of margins as sustainable going forward for catalysts?