The largest lithium miners in the world recorded a drop in the stock market as the disappointing sales of Livent Corp. have raised doubts about the mineral price estimates most commonly used in automotive batteries.
Livent dropped 9.1% on the New York Stock Exchange on Tuesday after declaring fourth-quarter earnings lower than expected by analysts. Albemarle Corp., the world's largest producer, declined by 3%. Soc. Química y Minera de Chile SA, the second largest, lost 2.8%.
Much of the production of the three companies focuses on lithium carbonate made from brine under the Andean salt of Chile and Argentina. However, the demand for battery manufacturers is changing to a more refined lithium hydroxide. Prices for lithium carbonate fell in 2018, while prices and lithium hydroxide demand rose, Livent CEO Paul Graves told analysts in a conference call Tuesday.
"It is clear that the market does not share the management team's opinion on price and long-term demand," said McMormrey Weil, an industrial technology analyst at Cormark Securities, in a comment after Livent's announcement. "This is not a question of lithium search itself, but a matter of the relative importance of this or that lithium compound."
Livent, based in Philadelphia, posted $ 119.8 million in income. for the three months ended December 31, lower than the average of US $ 123.3 million. of analysts' estimates gathered by Bloomberg.
Last year, Morgan Stanley lowered its forecast for Albemarle and SQM with the expectation of a contraction in lithium carbonate prices by nearly half by 2021. Prices of lithium carbonate produced in South America fell by 14%. in the second half of last year, but they are still almost three times higher than four years ago, according to Benchmark Mineral Intelligence.