Albemarle, one of the world's biggest producers of lithium, raised its full-year forecasts on Wednesday after surpassing quarterly profit expectations on robust demand and higher prices for the metal used in electric-vehicle batteries.
The improved outlook also came in above market estimates and helped send the company's shares 16% higher in extended trading.
Lithium's central role in the production of electric-vehicle batteries has made it a coveted commodity as global efforts to decarbonise automobiles gather pace. That has pushed up prices of the metal to record highs in a boost for producers.
Albemarle said it expected its average realized lithium price to jump two-fold this year as demand continues to rise and supply remains tight.
The remarks echo comments from Tesla CEO Elon Musk, who said last month that lithium supply was "a limiting factor" in the growth of EVs.
Albemarle said it now expected annual net sales between $5.2-billion and $5.6-billion, while analysts on average estimated a figure of $4.4-billion, according to Refinitiv IBES data.
The outlook is also underpinned by higher prices in the Charlotte, North Carolina-based company's bromine business.
Albemarle lifted its annual adjusted profit outlook to between $9.25 and $12.25 a share, from $5.65 to $6.65 a share. Analysts were expecting a figure of $6.22 a share.
In the three months ended March 31, the company earned an adjusted profit of $2.38 a share, smashing expectations of $1.63 a share.
Sales in Albemarle's lithium unit nearly doubled in the quarter to $550.3-million on the back of higher prices.