Lithium: Livent sees lower hydroxide prices in 2020

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Livent has reduced its expected Q4 2019 revenue to US$75–80M from US$90–100M and its full-year 2019 revenue to US$385–390M from US$400–410M on reduced volumes due to delayed orders and lower prices for its lithium products. EBITDA is forecast at US$14–17M in Q4 and US$75–80M for the full-year 2019. The company forecasts that prices for its lithium hydroxide in 2020 will fall by a low-to-mid-teens percentage and expects EBITDA to be lower in 2020 on higher third-party feedstock requirements.

Livent is also reviewing its expansion plans considering market conditions, although it currently maintains its prior 2020 volume outlook.

Roskill View

Roskill’s latest lithium update forecasts battery-grade lithium hydroxide prices to fall from almost US$15,700/t CIF Asia in 2019 to US$12,250t in 2020, and technical-grade from US$13,520/t to US$10,750/t, both representing around a 20% fall. As Livent was already supplying some battery-grade material on long-term contracts at lower prices to Roskill’s average in 2019, its “low-to-mid teens” fall would seem consistent with this view, although prices continue to remain variable by product type/quality, geography and consumer. Availability of industrial-grade carbonate for conversion remains strong, especially in/to the Chinese market where Livent has the majority of its hydroxide conversion capacity now, and prices for it are low (Q4 domestic China price of US$5,800/t excl. VAT) at less than half the Asia battery-grade hydroxide price; however, the market price is above that at which Livent can produce carbonate internally in Argentina, hence the margin squeeze.

Roskill’s Lithium Market Outlook to 2028 report was published in July 2019 and refreshed with regular updates, the most recent of which was released in January 2020. To download the brochure and sample pages for the report, or to access further information click here.

Roskill’s Lithium cost model service provides an in-depth analysis of the lithium supply chain, from the discovery of new mineral resources through to the production of battery-grade material. This analysis is critical in the evaluation of new lithium supply, as well as in accessing the security of supply from existing sources. For more details click here.

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This article was written by Robert Baylis. Please get in touch below if you wish to discuss further:

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