Albemarle warns of challenging lithium market through next year
2019-11-08 15:24:29 [Print]
Albemarle Corp warned on Thursday that prices for the battery metal are down nearly a third in the past year and that the industry has two to three times more supply than needed.
"We are and will be dealing with the challenging market conditions for the next 12 to 18 months," Albemarle Chief Executive Officer Luke Kissam stated. "There's an oversupply in the market today."
Albemarle has delayed construction plans for about 125,000 tonnes of additional lithium processing capacity, part of a plan to be cash flow-positive within two years.
The company said late on Wednesday it would launch a $100 million cost savings plan after it cut its sales and profit forecasts for the year. Asked by investors when the cost cutting would start, Kissam said it was not yet clear and promised answers at the company's annual investor day, planned for early December.
Despite the challenging market, Albemarle has no problems honoring existing contracts and is able to boost production should market conditions improve, Kissam said.
However, the company is in active negotiations with existing customers on long-term contracts about price, volume, timing and other facets, Kissam said, talks that could ultimately prove favorable for those customers.
In Chile, which has been experiencing social unrest in recent weeks, Albemarle's La Negra lithium plant has not run as well as the company had hoped, Eric Norris, president of the company's lithium global business unit, said. The plant is producing about 38,000 tonnes of lithium, about 2,000 tonnes less than expected.
"At this time, our plants are operational and shipments are moving on schedule," Chief Financial Officer Scott Tozier disclosed.
"We are and will be dealing with the challenging market conditions for the next 12 to 18 months," Albemarle Chief Executive Officer Luke Kissam stated. "There's an oversupply in the market today."
Albemarle has delayed construction plans for about 125,000 tonnes of additional lithium processing capacity, part of a plan to be cash flow-positive within two years.
The company said late on Wednesday it would launch a $100 million cost savings plan after it cut its sales and profit forecasts for the year. Asked by investors when the cost cutting would start, Kissam said it was not yet clear and promised answers at the company's annual investor day, planned for early December.
Despite the challenging market, Albemarle has no problems honoring existing contracts and is able to boost production should market conditions improve, Kissam said.
However, the company is in active negotiations with existing customers on long-term contracts about price, volume, timing and other facets, Kissam said, talks that could ultimately prove favorable for those customers.
In Chile, which has been experiencing social unrest in recent weeks, Albemarle's La Negra lithium plant has not run as well as the company had hoped, Eric Norris, president of the company's lithium global business unit, said. The plant is producing about 38,000 tonnes of lithium, about 2,000 tonnes less than expected.
"At this time, our plants are operational and shipments are moving on schedule," Chief Financial Officer Scott Tozier disclosed.
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