Albemarle (ALB) 9th Annual Lithium and Battery Supply Chain Conference summary

Market trends and supply-demand dynamics

• EV growth is strongest in China, with Europe flattening and the U.S. showing resilience despite challenges.

• Supply currently exceeds demand, leading to lower prices and a "lower for longer" cycle outlook.

• About 10%-20% of supply has been curtailed, but this is insufficient to balance the market.

• Chinese lepidolite production operates at a loss but is maintained for supply security, with capacity well under 50%.

• A significant price increase (over 2x current levels) is needed for Western expansion and to make new projects viable.

Industry structure and cost considerations

• The industry is young and fragmented, with many new entrants and a large share of capacity controlled by China.

• Many non-integrated hard rock conversion assets and 25% of the global lithium resource cost curve are unprofitable at current prices.

• Western Australian and other high-cost producers are underwater at current spodumene prices.

• Western operations can only sustain losses for a limited time before more capacity must exit.

• The cost curve has shifted up, making previous low price levels unsustainable for most producers.

Demand outlook and risks

• Lithium demand is forecast to grow from 1.3 million tons in 2024 to over 3 million tons by 2030.

• Plug-in hybrids are adding to demand without cannibalizing EV sales, especially in China.

• Achieving $100/kWh battery costs is a tipping point for EV adoption, already reached in China and expected globally in a few years.

• Subsidies are less critical as battery economics improve, though they remain a near-term catalyst.

• U.S. policy changes could impact demand, but the U.S. is the smallest of the three major EV markets.