On July 31, Albemarle, the world’s largest lithium miner, announced it had initiated a comprehensive review and assessment of its cost and operational structure. Immediately, the company took asset protection actions at its Kemerton lithium processing plant in Australia. These actions include halting construction on production line 3 and suspending production on production line 2, focusing instead on maintenance and enhancing the capacity of production line 1.
Albemarle stated that the company was taking measures to actively respond to ongoing industry changes to maintain long-term competitiveness in the lithium value chain. By taking these measures, Albemarle expected to preserve its leading position in global resources, enhance its cost competitiveness, efficiency and reduce capital intensity.
Kent Masters, Chairman and CEO of Albemarle, stated that the long-term growth potential in the company’s end markets remained strong, and planned to leverage its core capabilities to ensure the company remains competitive. He also said that given the dynamics of the global markets the company served, they must adjust production pace accordingly.
Albemarle also released its Q2 financial results on July 31, reporting an adjusted earnings per share of $0.04, compared to analyst expectations of $0.48. Net sales for Q2 were $1.4 billion (US), down 40% year-over-year from $2.4 billion (US). And the net loss reached $188 million (US), reducing by $838 million (US) compared to the same period last year.
Source: Albemarle’s Q2 financial report
Additionally, adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $386 million (US), down $880 million (US) year-over-year. Albemarle attributed these declines primarily to lower lithium market pricing, which compressed profit margins and reduced equity earnings.
According to Albemarle’s announcement, it is indicated that the average price of lithium salt is currently $12-15/kg LCE (Lithium Carbonate Equivalent), down from approximately $20/kg LCE in Q4 of last year.
Source：Albemarle’s Q2 financial report
Since November 2022, the price of Chinese lithium salt had continuously declined from a historical peak of 600,000 RMB/ton (approximately $82,236/ton), with the latest quote for battery-grade lithium carbonate at 80,500 RMB/ton( approximately $11,167/ton).
Affected by the downward cycle of the lithium industry, Chinese lithium companies also saw declines in performance. For instance, Ganfeng Lithium expected a net loss of 760 million to 1.25 billion RMB ($105.42 million-$173.41 million US) in the first half of the year, compared to a profit of 5.85 billion RMB ($811.55 million US) in the same period last year.
Tianqi Lithium estimated a net loss of 4.88 billion to 5.53 billion RMB ($676.99 million-$767.16 million US) in the first half of the year, compared to a net profit of 6.452 billion RMB ($895.07 million US)in the same period last year. Tianqi Lithium attributed the decline in performance to significantly lower lithium product sales prices year-over-year, resulting in a substantial decline in gross profit and a phase of operational losses.
Source: WeChat Official Account—锂电百事通
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