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Albemarle loses more than $1 billion on falling lithium prices

Albemarle, the world's largest lithium producer, stated on Thursday it lost more than $1 billion in the third quarter and that it would slash its capital budget amidst a 71% drop in rates for the electric car battery metal.

The outcomes highlight the supply glut engulfing the entire lithium industry amid oversupply from China and a softening of aggressive EV adoption rates that has dragged down prices for the ultralight metal.

Charlotte, North Carolina-based Albemarle is making business choices on the assumption that lithium costs stay in their existing range of roughly $12 to $15 per kilogram for the foreseeable future, CEO Kent Masters informed Reuters.

We do think the rate is going to be lower for longer, Masters stated. We're placing the business to compete at that level.

The business last month revealed its 2nd reorganization in as several years, explaining the move to diminish its service systems as needed to adjust to dynamic market conditions.

The moves - consisting of cutting at least 6% of its staff - are expected to save at least $300 million to $400 million each year moving forward.

The business likewise cut its 2025 capital budget plan in half from this year's levels to a series of $800 million to $900. million.

Masters stated the cut budget would be used to. preserve centers that operate at the lower end of the expense. curve, although he decreased to name specific websites.

Albemarle, which has likewise

cut other costs twice this year

, reported a net loss of $1.11 billion, or $9.45 per share,. compared with a net revenue of $302.5 million, or $2.57 per. share, in the year-ago quarter.

Earnings fell more than $1 billion to roughly $1.35. billion, although volumes of lithium sold rose from the year-ago. quarter. The sales drop was partially balanced out by long-lasting supply. contracts with clients that consist of Tesla.

Shares fell less than 1% in after-hours trading to. $ 96.50.

The company has actually been economically supported in part by. Washington, including a recent grant of

$ 67 million from the Energy Department

.

Funds that Albemarle has received under President Joe. Biden are expected to all or partially dry up when

President-elect Donald Trump

takes office in January, an issue that dragged down shares. of Albemarle and peers on Wednesday.

We work on both sides of the aisle, Masters said when. asked about the U.S. election results. The energy transition is. happening. It's a worldwide dynamic. We'll have to see what Trump. does.

FUTURE NEED EXPECTATION

Lithium miners got a partial reprieve from the. oversaturated market in September when China's CATL stated it. would cut production. Albemarle and its peers have consistently. said they

expect need for lithium to leap later on this years

.

North American EV sales hit a record in the third. quarter, executives noted, adding that they expect EV prices to. match those of internal combustion engine vehicles by next year.

Interest has actually been red-hot in the space from outsiders,. consisting of Exxon Mobil. One of Albemarle's top competitors,. Arcadium, concurred last month to be bought by mining. huge Rio Tinto in a

$ 6.7 billion offer

that will create the world's third-largest lithium. producer.

Masters stated Albemarle is not looking to obtain a. competitor.

At this phase, I don't see us being acquisitive, he. stated. If we're on somebody else's list, that I can't control.

Albemarle prepares to go over the quarterly outcomes on a. Thursday morning call with financiers.

Chile's SQM, the world's second-largest. lithium manufacturer, is set to publish quarterly outcomes later this. month.

(source: Reuters)