Albemarle Warns of Shakeout Among High-Cost Lithium Producers

Albemarle 

Prices remain too low to sustain global hardrock refining as demand outlook remains strong

Albemarle Corp, the world’s largest lithium producer, says the current price slump is accelerating a market shakeout, warning that many high-cost producers are teetering on the brink of financial unsustainability.

During its Q1 2025 earnings call, Albemarle executives revealed that nearly 40% of global lithium supply capacity is operating at or below breakeven, with a third of that capacity already idled. CEO Kent Masters emphasized that continued price weakness is unsustainable for large portions of the market:

“There’ll be pressure for others to come out of the market. It’s difficult to understand how long people can hold on,” Masters said.

Hardrock Refiners Hit Hard

The hardrock refining segment — particularly in regions with high operating costs — is proving especially vulnerable. Albemarle noted that while lithium demand continues to grow, a surge in new supply collided with a slowdown in EV sales growth, sending prices plummeting nearly 90% from their 2022 peak.

Despite the turbulence, Albemarle expects demand to grow in the mid-20% range this year and to double over the long term. But that growth alone isn’t enough to stabilize supply without price recovery.

“Prices well above current levels are required to support the necessary investment,” Masters stated.

Investment Freeze Looms Without Price Rebound

The prolonged low-price environment is stalling future project development and threatens to tighten long-term supply. Analysts note that unless the market corrects, future lithium availability could fall short of rising clean energy and EV sector needs.

As the lithium market recalibrates, Albemarle's remarks underscore a broader consolidation trend, with less-efficient producers likely to exit — or be absorbed — in the near term.