Posted on 06 May 2025
US lithium company Albemarle Corporation has estimated a $30-40 million direct impact from the ongoing trade war between Washington and Beijing.
Most of the hit, or around $30m, will come from trade flows from China to the US, with around $5m from US-China trade and another $5m from other countries’ imports into the US. Some critical minerals are fully or partially exempt from US President Donald Trump’s tariffs, and most of Albemarle’s lithium production is sold into Asia.
Still, the company is trying to mitigate the damage by managing inventory and increasing sales in lower-tariff countries.
This year, net sales are forecast at $4.9-7 billion, based on price estimates of $9,000-20,000/tonne of lithium carbonate equivalent (LCE). The group expects to reach break-even free cash flow this year, Kallanish understands.
Even as the lithium market remains depressed, Albemarle estimates lithium demand will at least double between 2024 and 2030. China is expected to continue leading EV demand globally, with electric vehicle production outpacing internal combustion engines this year.
Meanwhile, Europe’s EV penetration could be as much as 65% by decade-end, assuming current emission targets, while US demand will depend on policy outcomes, and may be dented by tariffs in the short term, the company notes.
In Q1, net sales dropped by 21% to $1.1 billion year-on-year, with net income growing 67% to $49m due to higher gross profit and lower cost of goods sold. Albemarle’s specialities division recorded an 11% rise in volumes, which offset an 8% drop in prices, while the energy storage arm saw a 34% decrease in pricing and flat volumes.
Albemarle has a strong presence in China with three lithium processing facilities in the country producing battery-grade lithium carbonate and lithium hydroxide, in addition to other operations. Outside of the US, it also has lithium mining and processing capacity in Australia and Chile.
Last year, the company put on hold plans for a $1.3 billion processing plant in South Carolina, US, due to competition from China and a weak pricing environment. Despite Washington’s onshoring push, a spokesperson says: “We remain committed to building a resilient domestic supply chain. However, the reinvestment economics need to align and given continued low lithium pricing, those economics are not there.”
Source:Kallanish
