MELBOURNE - Arcadium Lithium on Wednesday joined a growing list of producers reviewing lithium operations in Australia amid a rout in prices for the battery raw material that is expected to result in more production cuts.

The lithium market is reeling from rapid supply growth that has outpaced strong projections for demand from several years ago as uptake of electric vehicles has been slower than expected.

Arcadium is reassessing its Mount Cattlin operations in Western Australia given high costs and falling prices of raw material spodumene, CEO Paul Graves said on Wednesday as the miner announced a round of cost cuts to its global business.

That comes a week after top lithium producer Albemarle announced job cuts at its lithium hydroxide plant in the state, where it paused an expansion as part of a "comprehensive review" of its global cost and operating structure.

Reflecting compressed margins for producers, spot prices for spodumene AM-LI2O5 in top consumer China are hovering around $940 a metric ton, the lowest in almost three years.

Goldman Sachs expects spodumene prices to average $800 over the next year.

Australia which supplies a little less than half of the world's lithium, and is higher cost than South American brine producers, is likely to bear the brunt of the next round of production cuts, analysts said.

In places like China and Africa, high cost supply has already closed, except for integrated mines owned by chemical or battery producers that have been able to turn profits elsewhere in their business.

That leaves Australia where mines are not fully integrated, which means their owners are more exposed to a downturn in prices, said analyst Glyn Lawcock of investment bank Barrenjoey.

"If we don't get any more announcements, no more closures, and the ramp ups that are underway continue, then it does feel like there's probably a few quarters of tough footy for the lithium space," he said.

Supply is still growing in some quarters from single asset companies that have no choice but to continue building and because it's their only source of cash flow, he added.

That would apply to Australia's Liontown Resources which has just started production at its 500,000 tons per year Kathleen Valley project while Pilbara Minerals has also just completed an expansion.

High cost mines in Australia include Mt Marion, Wodgina and Bald Hill, owned by diversified miner Mineral Resources, which declined to comment.

MinRes shipped just under 500 000 dry metric tons of the raw material in the financial year ended in June. Mount Cattlin shipped around 205 000 tons in the 2023 financial year.

Mineral Resources said in its quarterly report last month that it would continue to "closely watch the market", as it flagged a delay to a planned expansion at its Wodgina mine.

"The current market is not as strong as we had thought. Prices have been impacted by softer EV demand from US and Europe," investor relations manager Chris Chong said on a call to analysts.