Albemarle expects 40% Chinese EV market growth to drive lithium demand

Albemarle Lithium Facility in Silver Peak, Nevada, U.S.
Sacks for lithium carbonate are seen at Albemarle Lithium production facility in Silver Peak, Nevada, U.S. October 6, 2022. REUTERS/Carlos Barria

Feb 16 (Reuters) - Lithium giant Albemarle Corp (ALB.N) expects China's electric vehicle (EV) market to grow 40% this year, or at least by 3 million vehicles, boosting demand for the battery metal in the world's largest auto market.

China's government has been phasing out subsidies for EVs, but Albemarle said so far those steps have had only a "limited impact" on EV demand. Executives attributed weak Chinese auto sales data in January to the Lunar New Year holiday.

Chinese lithium customers are not slowing orders and the country's stockpiles of cathodes and battery parts are decreasing, a harbinger of demand for the battery metal, executives said.

"Our biggest challenge is managing the tremendous growth opportunity in front of us," Chief Executive Kent Masters told investors on a conference call after the company posted better-than-expected quarterly results.

Separately, executives said they hoped the U.S. Inflation Reduction Act would make permitting easier for its planned lithium mine in Kings Mountain, North Carolina, and that they are open to partnering with an automaker for a planned European lithium processing plant.

The company is also in "active discussions" about restructuring its MRBL joint venture in Australia with Mineral Resources Ltd (MIN.AX).

Reporting by Ernest Scheyder; editing by Barbara Lewis

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Covers the future of energy and transportation including electric vehicle and battery technology, with a focus on lithium, copper, cobalt, rare earths and other minerals, politics, policy, etc. Previously covered the oil and natural gas, including a stint living in North Dakota’s Bakken shale oil patch.