The world's largest producer bets on the lithium hydroxide market, which currently registers prices and demand higher than lithium carbonate, which is produced in Chile.
The largest producer of lithium in the world is planning to expand production in Australia to target market in a specific form of this metal, which is increasingly used by batteries for electric cars.
Albemarle will stop plans to expand its lithium carbonium production in Chile, the company said on Thursday. Instead, he will use money for a project in Western Australia that produces lithium hydroxide, a growing metal type that grows in use and is currently being sold for prices higher than carbon.
The demand for global lithium in general is expected to be triple by 2025, according to Bloomberg NEF, as automakers like Tesla are trying to increase the sales of battery vehicles. Meanwhile, lithium miners have strive to meet demand, and metal prices have trebled in just four years.
"The current challenge in the area is that lithium companies need to increase their capital spending related to lithium price uncertainty," said Chris Berry, a New York based analyst and founder of the House research company. Mynydd Partners. "For Albemarle to maintain its share of the market with such a strong growth in lithium demand, the company needs to implement its capability expansion plans perfectly."
Albemarle plans to increase its lithium production volume in its operations in Chile, China and Australia to 225,000 tonnes a year in 2025 of 65,000 tonnes in 2017, the company said in its earnings report. In just four years, lithium has gone from Albemarle's least important product to represent 44.5% of the company's revenue in 2017.
On Thursday, the Charlotte, North Carolina company announced mixed results for the third quarter which led to a 1.8% reduction in its shares at 1:45 pm in New York. Capital expenditure increased, reaching record levels, but Albemarle did not meet sales estimates.