Challenges for lithium market
US lithium giant Albemarle Corporation has suspended one of its joint ventures due to continuous trying conditions for the commodity.
The company, which holds 49 per cent of the joint venture Talison Lithium project in Greenbushes, last week told investors lithium prices remained under pressure, mostly due to a pause in demand in China.
The company believes the sector’s trying conditions could last another 18 months.
Last week the company announced it would suspend its Wodgina lithium joint venture with Mineral Resources until market conditions supported production.
Last month Albemarle’s Talison joint venture partners Tianqui Lithium also halted the expansion of its refinery in Kwinana and the expansion on the Talison project.
“Our long-term view for global EV (market) growth remains intact so our focus is on supply and inventory that is in the channel,” Albemarle lithium president Eric Norris said.
“The new supply coming on will not exceed the demand growth, so the question is how much is still in inventory?”
“There is probably at least six months of product in inventory, maybe more, so you’re probably two to three times the inventory you should have, and that’s the drag on prices now and we see that having an effect into 2020.”
But despite current conditions, Albemarle chairman and chief executive Luke Kissam last week confirmed his long-term confidence in the sector.
He said the market would improve as battery technologies evolved further.
Bunbury Geographe Chamber of Commerce and Industry chief executive Mark Seaward said the chamber was concerned the oversupply could delay investment decisions, but was firm in the opinion that the oversupply would correct itself.
He said long term the industry would contribute to the local economy for more than 25 years.
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