The initial public offering (IPO) of shares in the newly
created Livent Lithium will help the fledgling company to face
the challenges of meeting global demand for lithium and to
solidify its position as a major supplier to the fast-growing
battery industry, according to chief executive officer Paul
The acquisition by Livent’s parent company,
FMC, of chemicals giant DuPont set the course for FMC to become
one of the largest agricultural solutions companies in the
world, and thus also paved the way for the
company’s lithium division to grow as an
independent company, Graves has told Fastmarkets.
"We have been supplying lithium hydroxide to the battery
industry for more than 30 years and have done so with stable
supplies of high-quality material, which means that our
customers can rely on us," he said.
"The IPO will allow us to work as an independent company,
facilitating investments, and to make decisions independently,
without the tensions that [can develop between] different
segments of a company that is focused on diverse businesses,"
Livent has a history as a supplier of lithium hydroxide to
the battery industry since 1986, from operations in the US
state of North Carolina as part of FMC. Now it has a clear
target to remain the chosen partner of the battery industry as
a supplier of lithium chemicals.
FMC started the IPO process on October 11, 2018, and will
end it on March 1, 2019, when FMC plans to sell to its
shareholders the remaining 86% stake that it holds in Livent.
Trading in the company’s shares opened on the New
York Stock Exchange on Monday November 19 at $18.45 per share,
within the expected price range of $18-20 per share.
Lithium: Livent's Fenix Salar in
Production expansions plans have driven the need for Livent
to raise more capital and to become an independent company, but
it expects to ramp up production only according to
customers’ needs, amid the current growing demand
for lithium compounds.
"We have plans to expand our lithium carbonate output from
20,000 tonnes in 2018 to 60,000 tonnes of lithium carbonate by
2025," Graves told Fastmarkets. "However, we will be using most
of this lithium carbonate to produce lithium hydroxide."
To cater for the growing demand for lithium battery
chemicals, Livent expects to produce 16,000 tonnes of lithium
hydroxide in 2018, expanding this to 20,000-22,000 tonnes in
The company’s lithium carbonate production in
2018 is expected to be 18,000 tonnes, but it intends to
increase this in 2019 to 18,500-19,000 tonnes.
Fastmarkets’ head of research for battery raw
materials, William Adams, expects to see demand for lithium
carbonate equivalent (LCE) growing year-on-year from 265,000
tonnes per year in 2018 to 345,000 tpy in 2020 and 1,000,000
tpy by 2025.
Fastmarkets Research expects a "low-case scenario" in 2018
of total global production of 272,100 tonnes of LCE.
Price volatility in lithium resulting from price swings in
China has been one of the principal factors affecting contract
price negotiations in recent years.
Over the course of the past 12 months, the price of battery-grade lithium carbonate, min 99.5%
Li2CO3, ex-works China, has fallen by 55.14% to
74,000-83,000 yuan ($10,689-11,989) per tonne on November 15
this year from 170,000-180,000 yuan per tonne on November 2,
2017, according to Fastmarkets’ assessments.
This came after a sharp price increase in 2016, when
battery-grade lithium carbonate spot prices in China rose by
198.87% to $26.60 per kg in March of that year from $8.90 per
kg in October 2015.
But Livent intends to create a win-win situation on price
for its customers on a stable, long-term basis.
"Livent looks to partner with our customers with the aim of
providing prices that reflect broad market conditions, while
also protecting both Livent and our customers from short-term
price swings," Graves told Fastmarkets.
"It is not clear where the market will be [in terms of
pricing] in the years to come," he added, "but our observations
tell us that China is developing as a different market. We
would not be surprised to see larger price volatility in China
while, in the rest of the world, prices remained more
The spot price of battery-grade lithium hydroxide
monohydrate (min 56.5% LiOH.H2O) in China fell by 23.58% to
110,000-120,000 yuan per tonne on November 15 from
148,000-153,000 yuan per tonne on January 11 this year,
according to Fastmarkets’ price records.
Meanwhile, the more stable contract prices for battery grade
lithium hydroxide (min 56.5% LiOH.H2O), updated monthly, cif
China, Japan and South Korea, were more resilient, falling by
just 5.26% to $17-19 per kg in October 2018 from $17-21 per kg
Looking toward growing Livent’s business at a
steady pace, Graves told Fastmarkets that the company does not
intend to grow for the sake of becoming big.
"We don’t aim to become the biggest lithium
producer in the industry, we aim to be the most important
partner in supplying lithium to the battery industry," he
Livent has a global footprint that spans across the
Americas, Europe and Asia. It produces lithium carbonate and
chloride in Argentina, lithium hydroxide in the US and China,
and butylithium in all three regions.
At the moment, Livent is also the only western producer of
high purity lithium metal.