Updated January 30th, 2024 at 13:07 IST
Albemarle, world's largest lithium producer, axes 300 jobs amid market downturn
Goldman Sachs estimates a surplus of 200,000 tonnes of lithium carbonate equivalent, constituting 17% of global demand, in 2024.
Albemarle layoffs news: Albemarle Corporation, the world's largest lithium producer, has laid off over 300 employees, equivalent to 4 per cent of its global workforce, according to The Information. This move comes amidst a challenging landscape for the lithium industry.
Lithium prices plummet
The oversupply of lithium, a vital component in electric vehicle (EV) batteries, has led to a staggering 80 per cent drop in prices, currently standing at $13,200 per tonne, the lowest since 2020, according to Benchmark Mineral Intelligence. The company had previously hinted at potential cost-cutting measures, citing the need to address market headwinds.
Goldman Sachs predicts surplus and output reductions
Goldman Sachs estimates a surplus of 200,000 tonnes of lithium carbonate equivalent, constituting 17 per cent of global demand, in 2024. This surplus is expected to prompt producers, especially in Australia, to make substantial reductions in output to rebalance the market.
Albemarle's strategic response
Albemarle had anticipated these challenges earlier in the month, suggesting a need for cost-cutting measures to navigate the current market conditions. The recent layoffs have affected various departments, including legal, mergers and acquisitions, marketing, materials sciences, research and development, and recycling.
BMI Research, a unit of Fitch Solutions, notes that Albemarle's vulnerability to market disruptions is linked to its significant focus on major lithium expansions through conversion assets. Despite the current challenges, lithium is expected to remain the company's primary revenue stream.
The Australian Office of the Chief Economist predicts further declines in lithium prices, forecasting the spot price of spodumene to fall to $2,200 in 2025. The current three-year low of lithium carbonate prices is attributed to oversupply and diminished demand from battery manufacturers, particularly in China.
BloombergNEF's battery price survey
In a related development, BloombergNEF's annual battery price survey reveals a 14 per cent drop in lithium-ion battery pack prices to a record low of $139/kWh. Despite the downturn, industry experts anticipate further declines in battery pack prices, with average prices expected to reach $133/kWh in 2024.
Future prospects and industry optimism
Despite the current market challenges, industry experts anticipate a rebound in lithium demand driven by accelerated electric vehicle production through 2030. Continued investment in research and development, along with the adoption of next-generation technologies, is poised to play a crucial role in further reducing battery costs over the next decade.
Published January 30th, 2024 at 13:07 IST