Albemarle expects 2020 profit drop on weak lithium prices
2020-02-20 13:36:15 [Print]
Albemarle Corp, the world's largest lithium producer, reported a lower-than-expected quarterly profit on Wednesday and forecast a double-digit drop in 2020 earnings on weak prices for the battery metal.
Lithium companies in the past year have been producing more than automakers currently need, denting prices. China, the world's largest electric vehicle market, is also facing an economic slowdown due to the coronavirus.
Albemarle posted fourth-quarter net income of $90.4 million, compared to $129.6 million a year ago. For 2020, the company forecast a drop in sales of at least 2%, to a range of $3.48 billion to $3.53 billion, and a dip in adjusted earnings of at least 16%, to about $4.80 to $5.10 per share.
Chief Executive Luke Kissam said the company should emerge stronger after the industry malaise settles. "We have the best lithium resources in the world and they will serve demand over the next 10 to 15 years," Kissam said in a statement.
Sales of lithium producers rose 20% to $411.1 million during the fourth quarter, as higher volumes offset a price drop. Sales of catalysts for refineries, which Albemarle has said are key to funding its lithium expansions, dropped.
Lithium companies in the past year have been producing more than automakers currently need, denting prices. China, the world's largest electric vehicle market, is also facing an economic slowdown due to the coronavirus.
Albemarle posted fourth-quarter net income of $90.4 million, compared to $129.6 million a year ago. For 2020, the company forecast a drop in sales of at least 2%, to a range of $3.48 billion to $3.53 billion, and a dip in adjusted earnings of at least 16%, to about $4.80 to $5.10 per share.
Chief Executive Luke Kissam said the company should emerge stronger after the industry malaise settles. "We have the best lithium resources in the world and they will serve demand over the next 10 to 15 years," Kissam said in a statement.
Sales of lithium producers rose 20% to $411.1 million during the fourth quarter, as higher volumes offset a price drop. Sales of catalysts for refineries, which Albemarle has said are key to funding its lithium expansions, dropped.
Spodumene Li2O 5%min In port China
Unit:RMB/dmtu
China's lithium maganate producers' sales volume statistics by province by month
Unit: RMB/mt
