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Albemarle, the world’s largest producer of lithium for electric vehicle batteries, could look at reducing capital expenditure in the coming years if lithium prices remain flat, the company said on Thursday.
Executives at the North Carolina-based company spoke in a call with analysts a day after reporting first quarter revenue was down 47% year-on-year due to lower lithium prices tied to a slowdown in the growth of global EV sales.
Albemarle maintained its outlook for the year, in which it plans to spend between $1.6 billion and $1.8 billion in capital expenditures, but said it may trim that amount in the future.
“If prices stayed where they were today, you’d see us ramping capex down. It would take a little bit of time,” said CEO Kent Masters.
He noted that the company needs to spend at least $1 billion a year to maintain its assets, and that he expected spending to remain above that level in 2025.
Albemarle pointed to higher EV sales in China in April, including at major automaker BYD, as a positive sign for lithium prices, but cautioned that current pricing would limit new projects from getting off the ground.
“You’ll see new projects that are planned coming off and struggling to get capital if we stay at prices like they are,” Masters said.
(By Daina Beth Solomon; Editing by Marguerita Choy)
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