Lithium prices 'unsustainable': Albemarle

US chemicals giant Albemarle has warned that low lithium prices could stifle investment decision-making but has faith in the long-term vision of the business.

Albemarle, which owns 49 per cent of the Talison Lithium joint venture operating the Greenbushes mine in the south west and the Kemerton lithium hydroxide plant near Bunbury, is one of the state’s largest lithium players.

In May last year the company hit go on a doubling of the production capacity at Kemerton, but depressed market conditions led it to scale back its plans in January.

Addressing an investor call last night, Albemarle chief executive Kent Masters said the company believed lithium prices were currently unsustainably low.

“For us to kind of reaccelerate [our investments], if you will, we’ll need to get a better view of what pricing is and the long-term view of that as well,” he said.

“We think that the prices today are unsustainable.

“They’re below operating cash levels of some assets that are currently operating, and they’re definitely below reinvestment levels.”

Mr Masters said he had full faith in the long-term vision for the diversified business, despite lithium’s struggles through 2023.

“The secular trends of clean energy electrification and digitalization continue to drive growth,” he said.

“We are uniquely positioned to capitalize on the opportunities in our end markets, in particular lithium demand.”

The comments came following the announcement of a quarterly net loss of $US618 million ($949 million).

The company revised its capital expenditure outlook for the 2024 calendar year, setting guidance in the range of $US1.6 billion - $US1.8 billion ($2.46 billion - $2.76 billion) down from $US2.1 billion ($3.2 billion) in 2023.

The forecast spend incorporated the investment in a third lithium train at Kemerton.

“Capital spend is focused on high return projects to expand Albemarle's global portfolio of conversion capacity and world-class resources, as well as productivity and cost savings initiatives,” Mr Masters said.

The results come off the back of a challenging month for battery metals miners in January.

Battery metals miner IGO – which owns around a quarter of Talison – said in January it expected a 20 per cent reduction in spodumene sales from the Greenbushes JV as it downgraded its production guidance.

Albemarle was one among a number of companies to announce closures, scale backs and suspensions on their battery metals and chemical processing projects during the month.