Albemarle, the world’s largest lithium producer, announced a second round of cost cuts this year due to plummeting lithium prices, which have significantly impacted its financial performance. The company reported a net loss of $188.2 million, or $1.96 per share, compared to a profit of $650 million, or $5.52 per share, in the same quarter last year. Excluding one-time items, earnings were just 4 cents per share, falling short of analysts’ expectations of 41 cents.
Lithium prices have dropped from an average of $20 per kilogram at the end of 2022 to approximately $12 to $15 per kilogram currently. This decline is attributed to oversupply from China and a slowdown in electric vehicle (EV) adoption rates. For instance, General Motors recently revised its target for EV production in North America.
Albemarle’s CEO, Kent Masters, indicated that the market is not improving and may continue to decline, prompting the company to conduct a comprehensive review of its cost and operational structure, which should be completed by October. The firm plans to pause construction on an Australian processing unit and idle production at another.
Despite these challenges, Albemarle maintained its full-year profit outlook, buoyed by its catalyst division and cost-saving measures that have already saved over $150 million this year. The company has a long-standing commitment to maintaining its dividend, which has been raised annually for 30 years.