Albemarle puts the break on growing plans amid lithium market weakness
Albemarle Corp (NYSE: ALB), the world’s No. 1 lithium producer, is delaying plans to add about 125,000 tonnes of processing capacity as an oversupply of the white metal used to make the batteries that power electric vehicles (EV) and high tech devices continues to push down prices.
The US-based lithium giant said the move would reduce its capital expenditure by about $1.5 billion over the next five years, adding it expected to become free cash flow positive in 2021.
Albemarle’s decision comes as lithium prices are expected to remain subdued this year after changes to Beijing’s EV subsidy regime has injected noticeable short-term unpredictability, while undermining demand from Chinese customers.
Supply, meanwhile, has been surging in response to the 2016-2017 price spike. According to
Fastmarkets estimates, the global lithium market glut will grow from 28,000 tonnes in 2018 to 68,000 tonnes this year and 146,000 tonnes in 2021.
Albemarle’s announcement comes only a week after the Charlotte, North Carolina-based revised a deal to buy into Australia’s Mineral Resources’(ASX: MIN) Wodgina mine.
It also follows the company’s second quarter results, which showed lithium sales were not affected by global trade tensions and China’s cuts to EV subsidies in June.
source: SteelMint
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