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The action will increase Livent's sale taxes in China but give it greater access
to growing markets for lithium in Japan, South Korea and elsewhere.
REUTERS | February 13, 2019, 15:37 IST
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Livent produces lithium in Argentina and then ships it to China and other places for
processing.
Livent Corp said on Tuesday it plans to export most of the lithium produced by its
Chinese processing facilities in 2019 because of uncertainty over the country's
electric vehicle subsidies as well as macroeconomic concerns.
The action will increase Livent's sale taxes in China but give it greater access to
growing markets for lithium in Japan, South Korea and elsewhere.
"We saw a real change in sentiment late in 2018 in China," Livent Chief Executive
Paul Graves said on a Tuesday conference call with investors and analysts.
Livent said late Monday that it expects demand for the white metal to sag in China
for the rest of the year. That report came as the company posted a quarterly profit in
line with Wall Street's expectations, with sales at the lower end of the forecast.
Graves, who became CEO last year when Livent was spun off from FMC Corp, said
the company started to negotiate 2019 contracts late last year and received verbal
commitments from Chinese customers on price and volume.
However, when the company went to sign the contracts, the Chinese customers
backed away, unwilling to sign deals for either one year or longer-term unless the
price was lowered, Graves said.
To the detriment of suppliers like Livent, China has been shifting its electric vehicle
subsidies from automakers to charging stations and other physical infrastructure,
Graves said.
"Customers in China have decided to delay purchasing until they have more clarity
on market dynamics," Grave said.
Livent now plans to process lithium at its China facilities this year but export nearly
all of it to customers outside the country, effectively boosting the company's sales
taxes.
ARGENTINA
The company also said that heavy rains at its Argentina lithium production facility
diluted evaporation ponds with more than 80 millimeters (3.2 inches) of water last
month, affecting more than 750 tonnes of production.
Livent produces lithium in Argentina and then ships it to China and other places for
processing. The company is looking for expansion opportunities to diversify, Graves
said.
- https://auto.economictimes.indiatimes.com/news/auto-components/livent-to-
export-chinese-lithium-in-2019-due-to-subsidy-uncertainty/67975512