Albemarle sees pressure building for high-cost lithium producers
Albemarle, the world’s biggest lithium supplier, is anticipating more pain for higher cost producers of the battery metal, many of which are losing money due to low prices.
About 40% of global supply capacity is either at or below breakeven, and about a third of that has been idled, Albemarle executives said Thursday on an earnings call.
“There’ll be pressure for others to come out of the market,” CEO Kent Masters said on the call. “It’s difficult to understand how long people can hold on.”
Producers are grappling to shore up their balance sheets after prices tumbled nearly 90% from a late-2022 record high due to new supplies hitting the market just as demand for electric vehicles began to slow. A particularly unprofitable part of the industry is hardrock refining, according to the Charlotte, North Carolina-based producer.
Stickier-than-expected global supply is helping keep prices languishing even as demand continues to expand. Albemarle sees demand growth in the mid-20% range this year depending on the impact of tariffs, with consumption set to double longer term. But without a recovery in prices, the supply side won’t develop enough new projects.
“Prices well above current levels are required to support the necessary investment,” Masters said.
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