Posted on 06 May 2024
US lithium chemical major Albemarle Corporation plans to conduct more lithium auctions after nearly swinging to a loss in its first quarter, Kallanish reports.
The company said this week it will hold auctions for spodumene concentrate and lithium carbonate at “a regular cadence” after completing four of them in March and April.
“These events inform the market of real-time physical trading dynamics and promote greater transparency in the evolving lithium market,” ceo Kent Masters said in an earnings call. “While the majority of our sales will continue to be on long-term agreements with our core strategic customers, bidding events give us another sales channel to expand our market access.”
Despite a downshift in demand growth in Europe and the United States, Masters says global EV sales increased 20% year-to-date, led by strong growth in China, which represents over 60% of the global EV market.
The company believes lithium demand will more than double by 2030, driven by technology development and an increase in battery sizes. “We expect that this industry needs more than 300,000 tonnes of new lithium capacity every year to satisfy this growth. This means we need more than 100 new lithium projects across resources and conversion between now and 2030 to support this demand,” the executive says.
During Q1 2024, Albemarle saw net sales nearly halved to $1.3 billion year-on-year and the company just about avoided a loss by posting net income of $2.4 million, compared to $1.2 billion last year.
The poor performance was mostly attributed to lower lithium market pricing, as well as additional margin compression due to timing of higher cost spodumene flowing through cost of goods sold and reduced equity earnings at the Talison joint venture.
These factors were partially offset by volumetric growth, primarily lithium carbonate and hydroxide, and spodumene sales at “favourable” prices, the company says.
It has maintained its full-year outlook, which includes capital expenditures of $1.6-1.8 billion, alongside $280m in productivity improvements. Albemarle expects a 10-20% volume sales growth this year, driven mostly in H2 due to demand seasonality and expansion ramp-ups.
At an average lithium market price of $20,000/tonne, Albemarle forecasts net sales of $6.1-6.8 billion and adjusted EBITDA of $1.6-1.8 billion. The company, however, has not provided a forecast for average prices this year.
Source:Kallanish
