Page 1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549
                                    FORM 10-Q



[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934

                    For Quarterly Period Ended June 30, 2001

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934


For Transition Period from ___________ to ___________



Commission File Number 1-12658



                              ALBEMARLE CORPORATION
              ------------------------------------------------------

              (Exact name of registrant as specified in its charter)



           VIRGINIA                                            54-1692118
-------------------------------                           --------------------
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                            Identification No.)



330 SOUTH FOURTH STREET
P. O. BOX 1335
RICHMOND, VIRGINIA                                                 23210
----------------------------------------                         ---------
(Address of principal executive offices)                         (Zip Code)


Registrant's telephone number, including area code - (804) 788-6000


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


       Yes   X                No
            ---                   ---



Number of shares of common  stock,  $.01 par value,  outstanding  as of July 31,
2001: 45,875,567


Page 2
                              ALBEMARLE CORPORATION

                                    I N D E X

                                                                       Page
                                                                      Number
                                                                      ------

PART I. FINANCIAL INFORMATION

 ITEM 1.  Financial Statements

          Consolidated Balance Sheets - June 30, 2001 and
          December 31, 2000                                             3-4

          Consolidated Statements of Income - Three- and Six-
          Months Ended June 30, 2001 and 2000                           5

          Consolidated Statements of Comprehensive Income - Three-
          and Six- Months Ended June 30, 2001 and 2000                  6

          Condensed Consolidated Statements of Cash Flows -
          Six Months Ended June 30, 2001 and 2000                       7

          Notes to the Consolidated Financial Statements                8-12

 ITEM 2.  Management's Discussion and Analysis of Results
               of Operations and Financial Condition, Additional
               Information, and Recent Developments                     13-19

 ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk    20

PART II. OTHER INFORMATION

 ITEM 3.  Legal Proceedings                                             20

 ITEM 6.  Exhibits and Reports on Form 8-K                              20

SIGNATURES                                                              21

EXHIBIT INDEX                                                           22

 EXHIBIT 21    List of Albemarle Corporation Subsidiaries

 EXHIBIT 99    List of Albemarle Corporation Officers


Page 3
      PART I - FINANCIAL INFORMATION
      ------------------------------

  ITEM 1.  Financial Statements
           --------------------


                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
                             (Dollars In Thousands)



                                                                        June 30, 2001      December 31, 2000
                                                                       -----------------  ------------------
                                                                          (Unaudited)
                                     ASSETS

Current assets:
                                                                                     
   Cash and cash equivalents                                           $          7,887    $         19,300
   Accounts receivable, less allowance for doubtful
      accounts (2001 - $3,001;  2000 - $2,119)                                  149,353             174,297
   Inventories:
      Finished goods                                                             90,789              79,143
      Raw materials                                                              11,303              10,804
      Stores, supplies and other                                                 18,234              17,471
                                                                      ------------------  ------------------
                                                                                120,326             107,418
   Deferred income taxes and prepaid expenses                                    13,348              14,139
                                                                      ------------------  ------------------
          Total current assets                                                  290,914             315,154
                                                                      ------------------  ------------------
Property, plant and equipment, at cost                                        1,337,340           1,326,534
      Less accumulated depreciation and amortization                            862,768             836,460
                                                                      ------------------  ------------------
          Net property, plant and equipment                                     474,572             490,074
Prepaid pension assets                                                          120,397             111,537
Other assets and deferred charges                                                93,005              42,583
Goodwill and other intangibles, net of amortization                              20,234              22,455
                                                                      ------------------  ------------------
Total assets                                                           $        999,122    $        981,803
                                                                      ==================  ==================




        See accompanying notes to the consolidated financial statements.

Page 4
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
                             (Dollars In Thousands)


                                                                         June 30, 2001     December 31, 2000
                                                                       -----------------  ------------------
                                                                          (Unaudited)
                 LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
                                                                                     
  Accounts payable                                                     $         61,793   $          72,296
  Long-term debt, current portion                                                   281                 299
  Accrued expenses                                                               47,520              56,932
  Dividends payable                                                               5,641               5,956
  Income taxes payable                                                           18,416               6,633
                                                                       -----------------  ------------------
          Total current liabilities                                             133,651             142,116
                                                                       -----------------  ------------------
Long-term debt                                                                  109,440              97,681
Other noncurrent liabilities                                                     86,443              83,496
Deferred income taxes                                                            91,298              99,603
Shareholders' equity:
  Common stock, $.01 par value, issued and outstanding-
    45,873,464 in 2001 and 45,823,743 in 2000                                       459                 458
  Additional paid-in capital                                                     57,922              57,223
  Accumulated other comprehensive (loss)                                        (21,428)            (14,688)
  Retained earnings                                                             541,337             515,914
                                                                       -----------------  ------------------
          Total shareholders' equity                                            578,290             558,907
                                                                       -----------------  ------------------
Total liabilities and shareholders' equity                             $        999,122    $        981,803
                                                                       =================  ==================




        See accompanying notes to the consolidated financial statements.

Page 5
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                        ---------------------------------
                     (In Thousands Except Per-Share Amounts)
                                   (Unaudited)



                                                  Three Months Ended                 Six Months Ended
                                                       June 30,                          June 30,
                                           -------------------------------   --------------------------------
                                                2001             2000             2001             2000
                                           --------------   --------------   --------------   ---------------
                                                                                  
Net sales                                  $     211,286    $     226,206    $     435,696    $      461,686
Cost of goods sold                               162,550          160,200          327,505           321,078
                                           --------------   --------------   --------------   ---------------
   Gross profit                                   48,736           66,006          108,191           140,608
Selling, general and administrative
    expenses                                      22,186           25,822           44,890            52,008
Research and development
    expenses                                       5,433            6,219           11,210            12,467
Special item                                        -             (15,900)            -              (15,900)
                                           --------------   --------------   --------------   ---------------
    Operating profit                              21,117           49,865           52,091            92,033
Interest and financing expenses                   (1,086)          (1,224)          (2,155)           (2,991)
Other income, net                                  1,236              363            2,818             1,336
                                           --------------   --------------   --------------   ---------------
Income before income taxes                        21,267           49,004           52,754            90,378
Income taxes                                       6,462           15,191           15,404            28,017
                                           --------------   --------------   --------------   ---------------
Net income                                 $      14,805    $      33,813    $      37,350    $       62,361
                                           ==============   ==============   ==============   ===============
Basic earnings per share                   $        0.32    $        0.74    $        0.81    $         1.36
                                           ==============   ==============   ==============   ===============
Diluted earnings per share                 $        0.32    $        0.73    $        0.80    $         1.34
                                           ==============   ==============   ==============   ===============
Cash dividends declared per share of
    common stock                           $        -       $        0.11    $        0.26    $         0.22
                                           ==============   ==============   ==============   ===============




        See accompanying notes to the consolidated financial statements.

Page 6
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                 -----------------------------------------------
                             (Dollars In Thousands)
                                   (Unaudited)



                                                  Three Months Ended                 Six Months Ended
                                                       June 30,                          June 30,
                                           -------------------------------   --------------------------------
                                                2001             2000             2001             2000
                                           --------------   --------------   --------------   ---------------
                                                                                  
Net income                                 $      14,805    $      33,813    $      37,350    $       62,361
Other comprehensive (loss) income,
   net of tax:
  Unrealized gain on securities
      available for sale                              32              354             (239)              332
  Foreign currency translation
      adjustments                                 (2,700)             (15)          (6,501)           (4,257)
                                           --------------   --------------   --------------   ---------------
Other comprehensive (loss) income                 (2,668)             339           (6,740)           (3,925)
                                           --------------   --------------   --------------   ---------------
Comprehensive income                       $      12,137    $      34,152    $      30,610    $       58,436
                                           ==============   ==============   ==============   ===============




        See accompanying notes to the consolidated financial statements.

Page 7
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 -----------------------------------------------
                             (Dollars In Thousands)
                                   (Unaudited)



                                                                            Six Months Ended June 30,
                                                                       ----------------------------------
                                                                            2001                2000
                                                                       --------------      --------------
                                                                                     
Cash and cash equivalents at beginning of year                         $      19,300       $      48,621
Cash flows from operating activities:
   Net income                                                                 37,350              62,361
   Adjustments to reconcile net income to cash flows
    from operating activities:
       Depreciation and amortization                                          37,014              36,189
       Special item                                                               -              (15,900)
       Working capital decrease (increase) excluding cash and
        cash equivalents                                                         743             (10,989)
   Other, net                                                                 (6,696)              4,266
                                                                       --------------      --------------
Net cash provided from operating activities                                   68,411              75,927
                                                                       --------------      --------------

Cash flows from investing activities:
   Acquisition of businesses                                                 (45,375)            (33,000)
   Capital expenditures                                                      (28,558)            (27,781)
   Investments in joint ventures and nonmarketable securities                 (6,193)             (7,381)
   Other, net                                                                    676               2,799
                                                                       --------------      --------------
Net cash used in investing activities                                        (79,450)            (65,363)
                                                                       --------------      --------------

Cash flows from financing activities:
   Proceeds from borrowings                                                   44,000              19,786
   Repayments of long-term debt                                              (31,014)            (44,700)
   Dividends paid                                                            (12,239)             (9,671)
   Purchases of common stock                                                      -               (8,853)
   Proceeds from exercise of stock options                                       598                 809
                                                                       --------------      --------------
Net cash provided from (used in) financing activities                          1,345             (42,629)
                                                                       --------------      --------------
Net effect of foreign exchange on cash and cash
  equivalents                                                                 (1,719)              1,229
                                                                       --------------      --------------
(Decrease) in cash and cash equivalents                                      (11,413)            (30,836)
                                                                       --------------      --------------

Cash and cash equivalents at end of period                             $       7,887       $      17,785
                                                                       ==============      ==============




         See accompanying notes to the consolidated financial statements

Page 8
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


1.     In the opinion of management,  the  accompanying  consolidated  financial
       statements of Albemarle Corporation and Subsidiaries ("Albemarle" or "the
       Company")  contain all adjustments  necessary to present  fairly,  in all
       material respects,  the Company's  consolidated  financial position as of
       June 30,  2001,  and  December  31,  2000,  the  consolidated  results of
       operations and comprehensive  income for the three- and six-month periods
       ended June 30, 2001, and 2000, and condensed  consolidated cash flows for
       the six-month  periods ended June 30, 2001, and 2000. All adjustments are
       of a normal and recurring nature. These consolidated financial statements
       should be read in conjunction with the consolidated  financial statements
       and notes  thereto  included in the  Company's  2000 Annual Report & Form
       10-K filed on February  28, 2001.  The  December  31, 2000,  consolidated
       balance  sheet data was derived from audited  financial  statements,  but
       does  not  include  all  disclosures   required  by  generally   accepted
       accounting principles.  The results of operations for the three- and six-
       month periods ended June 30, 2001, are not necessarily  indicative of the
       results to be expected for the full year.

2.     Long-term debt consists of the following:



                                                   June 30,                   December 31,
                                                    2001                         2000
                                           ----------------------        ---------------------
                                                                   
       Variable-rate bank loans            $              83,200         $             70,000
       Foreign borrowings                                 14,488                       15,916
       Industrial revenue bonds                           11,000                       11,000
       Miscellaneous                                       1,033                        1,064
                                           ----------------------        ---------------------
         Total                                           109,721                       97,980
       Less amounts due within one year                      281                          299
                                           ----------------------        ---------------------
         Long-term debt                    $             109,440         $             97,681
                                           ======================        =====================



3.     Cost of goods sold includes foreign exchange  transaction  (losses) gains
       of ($85) and $879,  and ($587)  and $1,298 for the three- and  six-months
       periods ended June 30, 2001, and 2000, respectively.

4.     In April 2000,  the  Company  made a change in election in certain of its
       pension annuity contracts. This election resulted in the recognition of a
       one-time noncash special  accounting  settlement gain of $15,900 ($10,128
       after income taxes),  or 22 cents per share on a fully diluted basis,  in
       accordance  with SFAS No. 88 "Employer's  Accounting for  Settlements and
       Curtailments  of Defined  Pension Plans and  Termination  Benefits".  The
       special item gain did not affect any retiree benefits or benefit programs
       of the Company.

5.     Cash  dividends  declared  for the  six-month  period ended June 30, 2001
       totaled  $0.26 per share  which  included a  dividend  of $0.13 per share
       declared  on  February  28,  2001,  payable  April 1, 2001,  as well as a
       dividend of $0.13 per share  declared on March 28, 2001,  payable July 1,
       2001.

Page 9
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


6.     Basic and diluted earnings per share for the three- and six-month periods
       ended June 30, 2001, and 2000, are calculated as follows:




                                                    Three Months Ended               Six Months Ended
                                                         June 30,                        June 30,
                                             -----------------------------   -----------------------------
                                                  2001            2000            2001            2000
                                             -------------- --------------   -------------- --------------
                                                                                
Basic earnings per share
 Numerator:
    Income available to
      stockholders, as reported              $      14,805  $      33,813    $      37,350  $      62,361
                                             -------------- --------------   -------------- --------------
 Denominator:
    Average number of shares of
      common stock outstanding                      45,873         45,795           45,855         45,939
                                             -------------- --------------   -------------- --------------
 Basic earnings per share                    $        0.32  $        0.74    $        0.81  $        1.36
                                             ============== ==============   ============== ==============
Diluted earnings per share
 Numerator:
    Income available to
      stockholders, as reported              $      14,805  $      33,813    $      37,350  $      62,361
                                             -------------- --------------   -------------- --------------
 Denominator:
    Average number of shares of
      common stock outstanding                      45,873         45,795           45,855         45,939
    Shares issuable upon
      exercise of stock options                        794            813              821            634
                                             -------------- --------------   -------------- --------------
 Total shares                                       46,667         46,608           46,676         46,573
                                             -------------- --------------   -------------- --------------
 Diluted earnings per share                  $        0.32  $        0.73    $        0.80  $        1.34
                                             ============== ==============   ============== ==============


Page 10
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


7.     The significant differences between the U.S. Federal statutory income tax
       rate on pretax  income and the  effective  income tax rate for the three-
       and six-month  periods ended June 30, 2001 and 2000,  respectively are as
       follows:




                                                                   % of Income Before Income Taxes
                                                      --------------------------------------------------------
                                                      Three Months Ended June 30,   Six Months Ended June 30,
                                                      ---------------------------  ---------------------------
                                                            2001        2000            2001        2000
                                                         ----------  ----------      ----------  ----------
                                                                                     
Federal statutory rate                                       35.0%       35.0%           35.0%       35.0%
Foreign sales corporation benefit                            (2.5)       (1.4)           (2.5)       (1.5)
State taxes, net of federal tax benefit                       1.0         0.8             1.0         0.7
Depletion                                                    (2.2)       (0.8)           (1.7)       (0.8)
Reversal of valuation allowance                                -           -             (2.0)         -
Other                                                        (0.9)       (2.6)           (0.6)       (2.4)
                                                         ----------  ----------      ----------  ----------
Effective income tax rate                                    30.4%       31.0%           29.2%       31.0%
                                                         ==========  ==========      ==========  ==========



       During  the first  quarter of 2001,  the  Company  released  a  valuation
       allowance  required  on a deferred  tax asset  related  to the  Company's
       facilities in  Louvain-la-Neuve,  Belgium,  which was established in 1996
       when the Company's Olefins Business was sold.

8.     At the  close of  business  on May 31,  2001,  the  Company  through  its
       wholly-owned  subsidiary Albemarle Deutschland GmbH, acquired Martinswerk
       GmbH ("Martinswerk"), including manufacturing facilities and headquarters
       in  Bergheim,  Germany  and  Martinswerk's  50 percent  stake in Magnifin
       Magnesiaprodukte  GmbH, which has manufacturing  facilities at St. Jakobs
       Breitenau,  Austria.  The  acquisition  has  been  accounted  for  by the
       purchase method of accounting and accordingly, the operating results have
       been included in the Company's  consolidated  results of operations  from
       the date of  acquisition.  The  preliminary  purchase  price plus accrued
       costs, which is subject to certain adjustments,  amounted to $45,375 plus
       the  assumption of certain  liabilities  and is reflected in the June 30,
       2001, balance sheet under the caption "other assets and deferred charges"
       while the  allocation of purchase price is being  completed.  Martinswerk
       produces  mineral-based  flame  retardants  for the  plastics  and rubber
       markets,  brightening  pigments for high-quality  paper  applications and
       specialty  aluminum  oxides for  polishing,  catalyst  and niche  ceramic
       applications.  Magnifin produces  high-purity  magnesium  hydroxide flame
       retardant  products  used in  applications  requiring  higher  processing
       temperatures.

       Net  sales  pro  forma  information  is  presented  as  follows  for  the
       six-month-periods  ended June 30, 2001 and 2000,  respectively,  prior to
       the  finalization  of  the  purchase  price  allocation  ("PPA"),  as  if
       Martinswerk GmbH and Martinswerk's 50% stake in Magnifin Magnesiaprodukte
       GmbH, which was acquired on May 31, 2001, had been acquired on January 1,
       2001 and 2000, respectively.  Net income and earnings per share data will
       be included when the PPA is completed.




                                                Six Months Ended      Six Months Ended
                                                  June 30, 2001         June 30, 2000
                                                ----------------      ----------------
                                                                
Net Sales                                              $485,682              $520,144
                                                ================      ================



Page 11
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


9.     The  Company  is a global  manufacturer  of  specialty  polymer  and fine
       chemicals,   currently  grouped  into  two  operating  segments:  Polymer
       Chemicals  and Fine  Chemicals.  The operating  segments were  determined
       based on management  responsibility.  The Polymer  Chemicals'  segment is
       comprised of flame retardants, organometallics and catalysts, and polymer
       additives and  intermediates.  The Fine Chemicals'  operating  segment is
       comprised of agrichemicals and pharmachemicals and performance chemicals.
       Segment data includes intersegment transfers of raw materials at cost and
       foreign  exchange  gains and losses as well as  allocations  for  certain
       corporate    costs.    The   corporate   and   other   expenses   include
       corporate-related items not allocated to the reportable segments.





                                                        Three Months Ended June 30,
                                                        ----------------------------
                                                        2001                    2000
                                                        ----                    ----
                                                 Revenues    Income      Revenues    Income
                                                ---------- ----------   ---------- ----------
Summary of segment results
                                                                       
Polymer Chemicals                               $ 108,916  $  15,288    $ 125,629  $  32,461
Fine Chemicals                                    102,370      9,198      100,577     19,803
                                                ---------- ----------   ---------- ----------
   Segment totals                               $ 211,286     24,486    $ 226,206     52,264
                                                ==========              ==========
Corporate and other expenses                                  (3,369)                 (2,399)
                                                           ----------              ----------
   Operating profit                                           21,117                  49,865
Interest and financing expenses                               (1,086)                 (1,224)
Other income, net                                              1,236                     363
                                                           ----------              ----------
Income before income taxes                                 $  21,267               $  49,004
                                                           ==========              ==========








                                                         Six Months Ended June 30,
                                                        ----------------------------
                                                        2001                    2000
                                                        ----                    ----
                                                 Revenues    Income      Revenues    Income
                                                ---------- ----------   ---------- ----------
Summary of segment results
                                                                       
Polymer Chemicals                               $ 229,872  $  36,146    $ 253,842  $  59,389
Fine Chemicals                                    205,824     24,090      207,844     41,709
                                                ---------- ----------   ---------- ----------
   Segment totals                               $ 435,696     60,236    $ 461,686    101,098
                                                ==========              ==========
Corporate and other expenses                                  (8,145)                 (9,065)
                                                           ----------              ----------
   Operating profit                                           52,091                  92,033
Interest and financing expenses                               (2,155)                 (2,991)
Other income, net                                              2,818                   1,336
                                                           ----------              ----------
Income before income taxes                                 $  52,754               $  90,378
                                                           ==========              ==========







Page 12
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


10.    On January 1, 2001, the Company adopted  Financial  Accounting  Standards
       ("FAS") No.  133,  "Accounting  for  Derivative  Instruments  and Hedging
       Activities".  The Company's transition adjustment did not have a material
       effect on the  financial  position or results of  operations  in 2001. In
       connection  with the adoption of FAS No. 133, the Company  elected not to
       utilize  hedge  accounting.  Consequently,  changes  in the fair value of
       derivatives are recognized in the Company's statement of operations.

       In July 2001, the Financial  Accounting  Standards  Board ("FASB") issued
       FAS No.  141,  Business  Combinations.  FAS No.  141  requires  that  the
       purchase  method  of  accounting  be used for all  business  combinations
       initiated after June 30, 2001 and establishes  specific  criteria for the
       recognition  of  intangible  assets  separately  from  goodwill,  and  it
       requires  unallocated  negative goodwill to be written off immediately as
       an extraordinary  gain. This Statement is not expected to have a material
       impact on the Company's financial statements.

       In addition,  the FASB issued FAS No. 142,  Goodwill and Other Intangible
       Assets.  FAS No. 142 eliminates the  amortization of goodwill and instead
       requires  a  periodic  review  of  any  goodwill   balance  for  possible
       impairment.  FAS No. 142 also  requires that goodwill be allocated at the
       reporting unit level and is effective for years  beginning after December
       15, 2001.  The Company will  discontinue  amortization  of goodwill as of
       January  1,  2002  for  book  purposes,  and will  comply  with  periodic
       impairment  test  procedures.  This  Statement  is not expected to have a
       material impact on the Company's financial statements.


Page 13
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


       ITEM 2.  Management's  Discussion  and Analysis of Results of  Operations
                ----------------------------------------------------------------
                and  Financial  Condition,  Additional  Information  and  Recent
                ----------------------------------------------------------------
                Developments
                ------------

       The  following  is  management's   discussion  and  analysis  of  certain
       significant  factors  affecting  the results of  operations  of Albemarle
       Corporation ("Albemarle" or "the Company") during the periods included in
       the  accompanying  consolidated  statements  of income and changes in the
       Company's financial condition since December 31, 2000.

       Some  of the  information  presented  in  the  following  discussion  may
       constitute  forward-looking  comments  within the  meaning of the Private
       Securities  Litigation Reform Act of 1995.  Although the Company believes
       its expectations are based on reasonable assumptions within the bounds of
       its knowledge of its business and  operations,  there can be no assurance
       that actual  results will not differ  materially  from its  expectations.
       Factors  that could  cause  actual  results to differ  from  expectations
       include,   without  limitation,   the  timing  of  orders  received  from
       customers,  the gain or loss of significant  customers,  competition from
       other  manufacturers,  changes in the demand for the Company's  products,
       increases in the cost of the products,  changes in the market in general,
       fluctuations in foreign currencies and significant changes in new product
       introduction  resulting  in an increase in capital  project  requests and
       approvals leading to additional capital spending.


       Results of Operations
       ---------------------
       Second  Quarter 2001 Compared with Second Quarter 2000
       ------------------------------------------------------

       Net sales for second quarter 2001 amounted to $211.3  million,  down 6.6%
       or $14.9  million from second  quarter  2000 net sales of $226.2  million
       primarily due to lower  shipments of flame  retardants  and catalysts and
       additives, lower shipments and prices in the Company's zeolites business,
       and the net effects of foreign  exchange in the European and Asia Pacific
       regions,  partially  offset by the  increase of $9.5 million in net sales
       resulting  from the May 31, 2001,  acquisition  of  Martinswerk  GmbH and
       higher shipments in oilfield chemicals.

       The gross  profit  margin  decreased  to 23.1% in 2001 from 29.2% for the
       corresponding  period in 2000.  Second-quarter  2001 operating profit was
       down 57.7% or $28.7 million from  second-quarter  2000 operating  profit,
       which  included  a  one-time  special  SFAS  No.  88  noncash  accounting
       settlement  gain of $15.9  million,  resulting  from an election  made to
       close certain pension contracts in the Company's pension plans. Excluding
       the  one-time  special  noncash  accounting   settlement  gain  in  2000,
       second-quarter  2001  operating  profit was down  37.8% or $12.8  million
       primarily due to lower  shipments of flame  retardants  and catalysts and
       additives,  lower  shipments and lower selling prices in surface  actives
       (zeolites)  and the  unfavorable  net  effects of foreign  exchange.  The
       preceding  unfavorable results for the second quarter of 2001 versus the
       corresponding  second  quarter in 2000 were offset,  in part, by improved
       demand in the Company's pharmachemicals and agrichemicals business, lower
       employee  related  costs and the  benefit of  aggressive  cost  reduction
       efforts.

       Selling, general and administrative expenses and research and development
       expenses,  decreased  13.8% or $4.4 million in the second quarter of 2001
       versus second quarter 2000 primarily due to lower employee  related costs
       and  aggressive  cost  reduction  efforts.  As a percentage of net sales,
       selling,  general and  administrative  expenses,  including  research and
       development  expenses,  were  13.1%  in 2001  versus  14.2%  in the  2000
       quarter.


Page 14
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


       Operating Segments
       ------------------
       Net sales by reportable business operating segment for the second quarter
       periods ended June 30, 2001 and 2000 are as follows:


                                                     Net Sales
                                                     ---------
                                                 2001          2000
                                              ----------    ----------
       Polymer Chemicals                       $108,916      $125,629
       Fine Chemicals                           102,370       100,577
                                              ----------    ----------
       Segment totals                          $211,286      $226,206
                                              ==========    ==========

       Polymer  Chemicals' net sales for second quarter 2001 decreased 13.3%, or
       $16.7 million, from second quarter 2000 net sales, primarily due to lower
       shipments of flame  retardants  ($12.3 million)  offset,  in part, by the
       increase in net sales of $5.7 million,  resulting  from the May 31, 2001,
       acquisition  of  Martinswerk  GmbH,  lower  shipments  of  catalysts  and
       additives  ($7.2  million)  and the  unfavorable  net  effects of foreign
       exchange.

       Fine  Chemicals' net sales for second quarter 2001 increased 1.8% or $1.8
       million from second  quarter 2000  primarily  due to higher  shipments in
       oilfield  chemicals of $2.3 million,  potassium and chlorine chemicals of
       $1.8 million and agrichemicals of $1.8 million as well as the increase in
       net sales of $3.8 million resulting from the May 31, 2001, acquisition of
       Martinswerk  GmbH  primarily  offset by lower  shipments and  unfavorable
       pricing in surface actives (zeolites).

       Operating profit by reportable  business operating segment for the second
       quarter periods ended June 30, 2001, and 2000 are as follows:


                                                  Operating Profit
                                                  ----------------
                                                 2001          2000
                                              ----------    ----------
       Polymer Chemicals                        $15,288       $32,461
       Fine Chemicals                             9,198        19,803
                                              ----------    ----------
       Segment totals                            24,486        52,264
       Corporate and other expenses              (3,369)       (2,399)
                                              ----------    ----------
       Operating profit                         $21,117       $49,865
                                              ==========    ==========

       Polymer  Chemicals' second quarter 2001 segment operating profit was down
       52.9%  or  $17.2  million  from  second  quarter  2000  primarily  due to
       decreased  shipments in flame  retardants and catalysts and additives and
       the  unfavorable  net effects of foreign  exchange in second quarter 2001
       versus  second  quarter  2000.  Polymer  Chemicals'  second  quarter 2000
       segment  operating  profit included an allocation of $6.0 million related
       to the  one-time  special  SFAS No. 88  settlement  gain.  Excluding  the
       one-time gain in 2000,  Polymer  Chemicals'  segment operating profit was
       down 42.2% or $11.2  million from second  quarter 2000.



Page 15
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


       Fine Chemicals'  second quarter 2001 segment  operating  profit decreased
       53.6% or $10.6  million from second  quarter 2000  primarily due to lower
       shipments and lower sales pricing in surface actives (zeolites) partially
       offset by improved  demand in  agrichemicals  and  pharmachemicals.  Fine
       Chemicals'  second  quarter 2000  segment  operating  profit  included an
       allocation  of $6.2 million  related to the one-time  special SFAS No. 88
       settlement  gain.  Excluding the one-time gain in 2000,  Fine  Chemicals'
       segment  operating  profit was down  32.5% or $4.4  million  from  second
       quarter 2000.

       Excluding the allocation of $3.7 million related to the one-time  special
       SFAS No. 88 settlement gain in the second quarter of 2000,  corporate and
       other  expenses for the second quarter of 2001 were down 45.1% percent or
       $2.8 million from second  quarter 2000  primarily  due to lower  employee
       related costs and aggressive cost reduction efforts.

       Interest  and  Financing  Expenses
       ----------------------------------
       Interest and financing  expenses for second  quarter 2001  decreased $0.1
       million from $1.2 million in second quarter 2000.

       Other Income, Net
       -----------------
       Other income,  net for the second  quarter 2001 amounted to $1.2 million,
       up $0.8 million from the corresponding period in 2000.

       Income Taxes
       ------------
       Income  taxes for second  quarter  2001 were lower  compared  to the same
       period in 2000  primarily due to lower income  before taxes in 2001.  The
       second quarter 2001 effective income tax rate was 30.4%,  down from 31.0%
       in second quarter 2000.


       Results of Operations
       ---------------------
       Six Months 2001 Compared with Six Months 2000
       ---------------------------------------------

       Net sales for the first six months of 2001  amounted  to $435.7  million,
       down  5.6% or $26.0  million  from the  corresponding  period of 2000 net
       sales of $461.7 million primarily due to lower shipments of catalysts and
       additives,  lower  shipments  and  unfavorable  prices  in the  Company's
       zeolites  business and lower  shipments of flame  retardants  and the net
       effects of foreign  exchange in the European  and Asia  Pacific  regions,
       partially  offset by the increase in net sales of $9.5 million  resulting
       from  the May 31,  2001,  acquisition  of  Martinswerk  GmbH  and  higher
       shipments in oilfield chemicals.

       The gross  profit  margin  decreased  to 24.8% in the first six months of
       2001 from  30.5%  for the  corresponding  period  in 2000.  The first six
       months of 2001 operating  profit was down 43.4% or $39.9 million from the
       2000  period,  which  included  a  one-time  special  SFAS No. 88 noncash
       accounting  settlement gain of $15.9 million,  resulting from an election
       made to close certain pension  contracts in the Company's  pension plans.
       Excluding the one-time  special  noncash  accounting  settlement  gain in
       2000, operating profit for the first six months of 2001 was down 31.6% or
       $24.0 million from 2000 primarily due to lower  shipments and lower sales
       pricing in surface actives  (zeolites),  lower shipments of catalysts and
       additives and flame  retardants,  higher  overall raw material and energy
       costs,  the impact of business  interruptions  at our plants and those of
       certain of our  customers,  net of accrued  insurance  recoveries and the
       unfavorable net effects of foreign exchange.  The preceding  unfavorable
       results for the first six months of 2001 versus the corresponding  period
       in 2000 were  offset,  in part,  by lower  employee  related  costs,  the
       benefit of aggressive  cost reduction  efforts and improved demand in the
       Company's agrichemicals business.


Page 16
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


       Selling, general and administrative expenses and research and development
       expenses, decreased 13.0% or $8.4 million in the first six months of 2001
       versus the 2000 period  primarily due to lower employee related costs and
       the benefit of aggressive cost reduction efforts.  As a percentage of net
       sales, selling, general and administrative  expenses,  including research
       and development expenses,  were 12.9% in the first six months 2001 versus
       14.0% in the corresponding period of 2000.

       Operating Segments
       ------------------
       Net sales by reportable  business  operating  segment for the  six-months
       periods ended June 30, 2001 and 2000 are as follows:


                                                     Net Sales
                                                     ---------
                                                 2001          2000
                                              ----------    ----------
       Polymer Chemicals                       $229,872      $253,842
       Fine Chemicals                           205,824       207,844
                                              ----------    ----------
       Segment totals                          $435,696      $461,686
                                              ==========    ==========

       Polymer  Chemicals'  net sales for the first six months of 2001 decreased
       9.4% or $24.0 million from the corresponding period in 2000 primarily due
       to lower  shipments in catalysts  and  additives of $15.3  million and in
       flame retardants of $9.4 million offset,  in part, by the increase in net
       sales of $5.7 million,  resulting  from the May 31, 2001,  acquisition of
       Martinswerk GmbH and the unfavorable net effects of foreign exchange.

       Fine Chemicals' net sales for the first six months of 2001 decreased 1.0%
       or $2.0 million from the  corresponding  period in 2000  primarily due to
       lower  shipments and unfavorable  pricing in surface  actives  (zeolites)
       primarily  offset by  higher  shipments  in  oilfield  chemicals  of $4.4
       million as well as the  increase in net sales of $3.8  million  resulting
       from  the May 31,  2001,  acquisition  of  Martinswerk  GmbH  and  higher
       shipments of potassium and chlorine chemicals of $1.7 million.



Page 17
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


       Operating  profit  by  reportable  business  operating  segment  for  the
       six-months periods ended June 30, 2001, and 2000 are as follows:


                                                  Operating Profit
                                                  ----------------
                                                 2001          2000
                                              ----------    ----------
       Polymer Chemicals                        $36,146       $59,389
       Fine Chemicals                            24,090        41,709
                                              ----------    ----------
       Segment totals                            60,236       101,098
       Corporate and other expenses              (8,145)       (9,065)
                                              ----------    ----------
       Operating profit                         $52,091       $92,033
                                              ==========    ==========

       Polymer  Chemicals' first six months of 2001 segment operating profit was
       down  39.1%  or  $23.2  million  from the  corresponding  period  in 2000
       primarily due to decreased shipments in catalysts and additives and flame
       retardants,  higher raw material and energy costs, the impact of business
       interruptions at our plants and those of certain of our customers, net of
       accrued  insurance  recoveries and the unfavorable net effects of foreign
       exchange in the 2001 period  versus the 2000 period.  Polymer  Chemicals'
       segment  operating  profit for the first six months of 2000  included  an
       allocation  of $6.0 million  related to the one-time  special SFAS No. 88
       settlement gain.  Excluding the one-time gain in 2000, Polymer Chemicals'
       segment  operating profit for the first six months of 2001 was down 32.3%
       or $17.2 million from the corresponding period in 2000.

       Fine  Chemicals'  first  six  months  of 2001  segment  operating  profit
       decreased  42.2% or $17.6 million from the  corresponding  period in 2000
       primarily  due to lower  shipments  and lower  sales  pricing  in surface
       actives  (zeolites),  higher raw material and energy costs, the impact of
       business interruptions at our plants, net of accrued insurance recoveries
       partially  offset by improved  demand in  agrichemicals.  Fine Chemicals'
       segment  operating  profit for the first six months of 2000  included  an
       allocation  of $6.2 million  related to the one-time  special SFAS No. 88
       settlement  gain.  Excluding the one-time gain in 2000,  Fine  Chemicals'
       segment  operating profit for the first six months of 2001 was down 32.2%
       or $11.4 million from the corresponding period in 2000.

       Excluding the allocation of $3.7 million related to the one-time  special
       SFAS No. 88  settlement  gain in the first six months of 2000,  corporate
       and  other  expenses  for the first  six  months of 2001 were down  36.4%
       percent or $4.6 million from the  corresponding  period of 2000 primarily
       due to lower  employee  related costs and the benefit of aggressive  cost
       reduction efforts.

       Interest and Financing Expenses
       -------------------------------
       Interest  and  financing  expenses  for  the  first  six  months  of 2001
       decreased $0.8 million from $3.0 million in the  corresponding  period of
       2000 primarily due to lower average outstanding debt.


Page 18
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


       Other Income, Net
       -----------------
       Other  income,  net for the first six  months  of 2001  amounted  to $2.8
       million, up $1.5 million from the corresponding period in 2000.

       Income Taxes
       ------------

       Income taxes for the first six months of 2001 were lower  compared to the
       same period in 2000 due to lower income  before taxes and the reversal in
       2001 of a deferred tax  valuation  allowance  associated  with one of the
       Company's  foreign  subsidiaries.  The effective  income tax rate for the
       first six months of 2001 was 29.2%,  down from 31.0% in the corresponding
       period of 2000.


       Financial Condition and Liquidity
       ---------------------------------

       Cash  and  cash   equivalents  at  June  30,  2001,  were  $7.9  million,
       representing  a decrease of $11.4  million from $19.3 million at year-end
       2000.

       Cash flows provided from operating activities of $68.4 million,  together
       with $44 million of proceeds from borrowings from the Company's Revolving
       Credit  Agreement and $11.4 million of existing cash and cash equivalents
       were  used to cover  acquisition  of the  Martinswerk  business,  capital
       expenditures,  payment of  dividends,  repayment  of debt and  additional
       investments in the Company's joint ventures. The Company anticipates that
       cash provided from operations in the future will be sufficient to pay its
       operating expenses,  satisfy  debt-service  obligations and make dividend
       payments.

       The change in the Company's accumulated other comprehensive (loss) income
       from  December  31,  2000,  was  primarily  due to net  foreign  currency
       adjustments,  net of related  deferred  taxes,  primarily  related to the
       strengthening of the U.S. Dollar versus the Euro and the Japanese yen.

       The noncurrent portion of the Company's long-term debt amounted to $109.4
       million at June 30, 2001,  compared to $97.7  million at the end of 2000.
       The  Company's  long-term  debt,  including  the  current  portion,  as a
       percentage  of total  capitalization  amounted to 15.9% at June 30, 2001.
       The Company is guarantor of $5.2 million of long-term  debt,  in the form
       of commitments,  on behalf of its 50-percent owned joint venture company,
       Jordan Bromine Company Limited.  The Company's long-term debt,  including
       the guarantee,  as a percent of total capitalization amounted to 16.6% at
       June 30, 2001.

       The Company's  capital  expenditures in the first six months of 2001 were
       slightly  higher  than the same  period  of  2000.  For the year  capital
       expenditures  are  forecasted  to be higher than the 2000 level.  Capital
       spending will be financed  primarily with cash flow from  operations with
       additional  cash, if any,  provided from additional  debt. The amount and
       timing of any additional borrowings will depend on the Company's specific
       cash requirements.

       The Company is subject to federal,  state, local and foreign requirements
       regulating the handling,  manufacture and use of materials (some of which
       may be  classified  as  hazardous  or  toxic  by one or  more  regulatory
       agencies),  the  discharge  of  materials  into the  environment  and the
       protection of the environment.  To the Company's knowledge,  it currently
       is  complying  with and  expects to  continue  to comply in all  material
       respects  with existing  environmental  laws,  regulations,  statutes and
       ordinances.  Such  compliance  with  federal,  state,  local and  foreign
       environmental  protection  laws is not  expected  to have in the future a
       material effect on earnings or the competitive position of Albemarle.

Page 19
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


       Among  other  environmental  requirements,  the Company is subject to the
       federal  Superfund  law, and similar state laws,  under which the Company
       may be designated as a  potentially  responsible  party and may be liable
       for a share of the costs  associated  with cleaning up various  hazardous
       waste sites.


       Additional Information
       ----------------------

       Outlook
       -------
       In  Fine   Chemicals,   we  believe   we'll  see   improvements   in  our
       pharmachemicals and agrichemicals  business. To realize such improvements
       it is important  that our  ibuprofen  operation,  currently  running near
       capacity,  must meet anticipated strong  second-half  customer demand. We
       are confident,  provided the announced  plant  expansion  plans currently
       underway are completed as scheduled, we can meet this demand. We continue
       to position our oilfield chemicals and bromine derivatives for the future
       with progress on our joint venture bromine  project in Jordan.  We expect
       to see 2001  Fine  Chemicals'  results  slightly  below or even with 2000
       levels.

       In  Polymer  Chemicals,  we  foresee  continued  softness  in  our  flame
       retardants  business due to  continuing  weakness in end-use  electronics
       markets.  In  addition,  with an expected  slow  recovery in  polyolefins
       impacting  our  catalyst  and  additives  businesses,  it is  likely  our
       second-quarter  2001  level of  performance  in  Polymer  Chemicals  will
       continue  throughout  the second half. We will continue to manage our way
       through  this  difficult  economic  situation  proactively,   positioning
       ourselves to take full advantage for an ultimate recovery,  while staying
       focused on long-term strategies, which we believe to be sound.

       Additional  information regarding the Company, its products,  markets and
       financial  performance  is provided at the  Company's  Internet web site,
       www.Albemarle.com.


       Recent Developments
       -------------------

       In early July, the Company announced the completion of its acquisition of
       the custom and fine chemicals businesses of ChemFirst  Inc.(NYSE:CEM) for
       $79  million  in cash,  which  will be  financed  through  the  Company's
       existing  Revolving Credit Agreement.  The Asset Purchase  Agreement also
       provides for additional  contingent payments to ChemFirst not expected to
       exceed $10 million.  Albemarle's new businesses  focus on the manufacture
       of custom and  proprietary  fine chemicals and chemical  services for the
       pharmaceutical and life sciences industries.  They also include additives
       for  ultraviolet  light-cured  polymer  coatings which should broaden the
       portfolio  of  Albemarle's  polymer  chemicals  business.  Included  is a
       multi-functional  manufacturing plant in Tyrone, Pennsylvania, and a cGMP
       pilot plant in Dayton, Ohio.



Page 20
                     ALBEMARLE CORPORATION AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                 ----------------------------------------------
                (In Thousands Except Share and Per-Share Amounts)
                                   (Unaudited)


       ITEM 3. Quantitative and Qualitative  Disclosures About Market Risk
               -----------------------------------------------------------
       There  have  been no  significant  changes  in our  interest  rate  risk,
       marketable  security  price  risk or raw  material  price  risk  from the
       information  provided  in our Form 10-K for the year ended  December  31,
       2000.



      Part II - OTHER INFORMATION
      ---------------------------

       ITEM 3. Legal Proceedings
               -----------------

       The Company and its  subsidiaries are involved from time to time in legal
       proceedings  of types  regarded  as common in the  Company's  businesses,
       particularly  administrative or judicial  proceedings seeking remediation
       under  environmental  laws,  such as  Superfund,  and products  liability
       litigation.

       While it is not  possible  to predict  or  determine  the  outcome of the
       proceedings  presently pending,  in the Company's opinion they should not
       result  ultimately  in  liabilities  that are  likely to have a  material
       adverse  effect upon the results of operations or financial  condition of
       the Company and its subsidiaries on a consolidated basis.


       ITEM 6. Exhibits and Reports on Form 8-K
               --------------------------------

              (a)  Exhibits

                    The following documents are filed as exhibits to this Form
                    10-Q pursuant to Item 601 of Regulation S-K:

                    21. List  of  the  Company's  significant  subsidiaries  as
                        adjusted to reflect the acquisition of Martinswerk GmbH
                        (filed herewith).

                    99. List of Albemarle Corporation Officers (filed herewith).

              (b)   The report on Form 8-K filed June 1, 2001, related to the
                    May 31, 2001, completion of the acquisition of Martinswerk
                    GmbH is incorporated herein by reference.


Page 21
                                   SIGNATURES
                                   ----------

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                              ALBEMARLE CORPORATION
                                              ---------------------
                                              (Registrant)


Date: August 13, 2001                         By: s/ Robert G. Kirchhoefer
                                                  -----------------------------
                                                  Robert G. Kirchhoefer
                                                  Treasurer and
                                                       Chief Accounting Officer
                                                  (Principal Accounting Officer)





Page 22
                                  EXHIBIT INDEX
                                  -------------
                                                                       Page
                                                                      Number
                                                                      ------
EXHIBIT
-------

21.     List of Albemarle Corporation Subsidiaries                       23

99.     List of Albemarle Corporation Officers                           24