Albemarle cuts annual forecast on slumping lithium prices

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A lithium evaporation pond is seen at Albemarle Lithium’s production facility in Silver Peak, Nevada, U.S., October 6, 2022. REUTERS/Carlos Barria/File Photo Acquire Licensing Rights

Nov 1 (Reuters) – Albemarle (ALB.N), the world’s largest producer of lithium for electric vehicle batteries, cut its full-year forecast on Wednesday, reporting lower-than-expected quarterly profit amid falling prices for the ultra-light metal.

Shares fell 1.9% to $120.67 in after-hours trading.

Concerns are mounting that global demand for electric cars is declining and not keeping pace with the aggressive growth targets of automakers and regulators.

This is reflected in lithium prices, which have fallen by more than 60% this year. Albemarle, which supplies Tesla (TSLA.O) and other automakers, sells most of its lithium under long-term contracts tied to market prices.

The company now expects the volume of lithium it sells this year to rise by at least 30% from last year’s levels, but prices will rise only 15%, far behind the strong growth Wall Street had expected.

Albemarle reported third-quarter net income of $302.5 million, or $2.57 per share, compared with $897.2 million, or $7.61 per share, in the same period a year ago.

Excluding one-time items, Albemarle earned $2.74 per share. Based on that metric, analysts expected earnings of $3.99 per share, according to IBES data from LSEG.

For the full year, the company lowered its net sales guidance to $9.5 billion to $9.8 billion. Albemarle previously expected $10.4 to $11.5 billion.

The Charlotte, North Carolina-based company plans to hold a conference call with investors on Thursday to discuss the results.

Albemarle this month halted its $4.2 billion bid for Australian lithium developer Liontown Resources (LTR.AX), citing “increasing complexity.” Hancock Prospecting, an iron ore miner controlled by Gina Rinehart, Australia’s richest person, owns more than 19% of Liontown’s shares.

Rival Livent (LTHM.N) reported a drop in quarterly profit on Tuesday, citing expansion delays at a key project in Argentina.

Reporting by Ernest Scheyder Editing by Chris Reese and David Gregorio

Our Standards: Thomson Reuters Trust Principles.

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