Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and welcome to the First Quarter 2023 Earnings Release Conference Call for Livent Corporation. Phone lines will be placed on listen-only mode throughout the conference. After the speakers’ presentation, there will be a question-and-answer period.

I will now turn the conference over to Mr. Daniel Rosen, Investor Relations and Strategy for Livent Corporation. Mr. begin. may you Rosen,

Daniel Rosen

Good earnings and call. Rob. first to quarter XXXX evening, you, welcome everyone, Livent’s Thank

Officer. Joining and and Financial Chief today Executive me are Officer; Gilberto Paul Antoniazzi, Graves, President Chief

along The after with found slide the the section from call. Prepared Relations our Investor accompanies be today’s presentation our discussion in our release, will can that earnings be website. remarks of results, made available

to remarks, Paul and address available your prepared be questions. our Following will Gilberto

a any request of the We’d call after Given and today, follow-up one the the number participants one would question of be on we happy additional call. limit per caller. to address questions

but begin, let factors identified limited our we to discussion are Exchange to, Form that today’s in subject filings other XX-K and will including, include various Securities risks Before concerning with not remind statements Commission. uncertainties the that me those forward-looking and and you factors, specific

results upon to discussion and provided presented Investor our of accordance information. directly best Relations judgment in based metrics. reconciliation financial as references uncertainties. these financial website. measure Today’s comparable are today’s most presented on with and Definitions terms based on well may Actual will GAAP various non-GAAP risks as Information the our vary to include calculated represents these

over that, I’ll turn Paul. And with the to call

Paul Graves

Thank you, everyone. Dan, and good evening,

Whabouchi. Livent reporting products. XXXX, which approved Lithium, of result the hydroxide project and phase at across all a start million progress quarter important prices mining of was $XXX of lithium improvement as commencement of of financial The several quarter. is had in the higher quarter to results a the higher XX,XXX development is Board Nemaska the complete. year. the operations facility construction XX% shareholder, And this XXXX, fourth of of now at The strong has EBITDA Adjusted milestones ton, earlier of realized being Lithium reached record Nemaska nearly of Livent detailed start in to lithium metric this in and average the the the expected, the engineering first project continues with than Bécancour a XX%

is and Nemaska second study which then planned XXXX. spodumene production production will quarter. pathway initial sale feasibility second the A be be in replaced the released XXXX, commencing outline of of hydroxide, sale Lithium half an This to will and in of by the to expected study in by lithium

Livent guidance financial results. year-over-year XX% has increase. for adjusted XXXX and or full meaningful million, raised year by midpoint to EBITDA highlighted improvement following is continues XXXX $XXX expect a for record its This of

quarter, our price market ahead allowing for and pricing way last As visibility opportunities. take contracts It XXXX approach, retaining provides commercial us. prices, earnings exposure also the while structured to we we for customer market greater some across than to advantage a brings year the benefits discussed of portfolio flexibility two of to purely

operations have help We years BMW, agreement to with years. visibility committing our our greater greater will announced which bring coming additional that also we and this supply relationship, amended to in extended volumes the and

turn will and Before guidance. focus performance, to our quarter areas financial to discuss I year our highlight full as first market I well Livent, call the provide key observations revised some over XXXX for Gilberto as

Gilberto Antoniazzi

everyone. good evening, Thanks, And Paul.

EBITDA up the versus share. These of slide considerably diluted metrics million, reported to as revenue as Livent well per first adjusted $X.XX all XXXX. of quarter quarter $XXX quarter earnings fourth Turning versus X. of million, the first adjusted of $XXX financial and were

calls. we portion last of demand. earnings our to year, quarter delivered across to see on sold as lithium strong Livent our were committed in quarter, prior in Total as versus saw quarter first products ‘XX quarter average we realized and price the were continue customers flat due of all volumes the of discussed the slightly to higher the volumes last versus a fourth down

EBITDA higher EBITDA improvements offset basis, to price This driven more price costs across Adjusted the XX% fourth higher lithium a than compared all X costs. was a times was nearly the products meaningful sequential On quarter with operating adjusted a as quarter. versus improvement, same ago primarily year performance year lower was by ago quarter. coupled

Let more improved a bit provide our performance. color me on pricing

provided While improvement we were last on quarter. on prices achieved all negotiated call is regarding last earnings prices commentary observed volumes. hydroxide year’s across consistent fourth price we than increases higher product with that the our This for average higher realized in the lines, XX% we across contract our

related. royalties and in lithium quarter with of lithium mostly timing the delaying production our metal export to lithium due higher of The are shipments fit butyllithium out coupled thus of purchases. products, Lower metal chloride cost saw third-party were downstream we to timing reductions Argentina,

full the results. to year quarter the -- ahead, we total our spending higher in first For see $XX in capital quarters expect Livent’s million. costs was

reach we in our We completion well lithium lithium expansion expect increase of Argentina the ton this ton of China. metric XX,XXX the target the in and remainder as to expansion second hydroxide as year carbonate metric year-end as XX,XXX over

of Livent million. expenditures to million from in higher projected to slightly adjusted to and a by than $XXX capital anticipated million, XXXX XXXX, operations are reminder, be cash would $XXX As million $XXX in the be supported $XXX range

revolving no quarter remains $XXX overall and balance strong. $XXX withdrawal Our our facility. in liquidity and cash, We with very the million credit under ended million sheet

combination our a us ability our The cash our current to give capacity for the of expansions. generation, cash to strong generally in credit and confidence level draw fund our continued ability facility on position,

leading to and full year performance On results. slide guidance, raised compared we to see you will to in X, have substantial that record XXXX, financial we continue improvement expect a Livent’s XXXX

billion million project to to at $X.XXX adjusted million to EBITDA XX% implies revenue versus be $XX growth growth higher of midpoints million. be XXXX. the For to we and and $XXX XX% year, EBITDA $X.XXX higher billion; million adjusted $XXX full now of at revenue This $XX at

offset volume all higher based by and anticipated higher sold, higher across pricing costs. realized partially to on two continues Our products, average be guidance the

of sales by of phases roughly We first higher expansion XX% or in and hydroxide expansion carbonate versus lithium line. in last of Argentina, metric increase on coming is City, tons be on an initial X,XXX was lithium This our volumes basis, new Bessemer expect line LCEs complete startup our XX,XXX metric the X,XXX process. ton feed will metric in end North carbonate now This is ton includes which XXXX. at This a Carolina, to completed that year. driven

volumes sales most be of half incremental this second realized expect year. We these of the in to

year price than months they with expect Looking many points XXXX. reemphasize are we ago, forecast of a lower were Recognizing ahead, to in few prices that the remaining are at there now Livent, to three Livent. we will continue realized average the see improvements meaningful respect we key for

XX% on or roughly volumes that set XXXX the price First, prior of take we many our were have of to our firm last these previously And terms February. that fixed pay in are earnings disclosed call commitments.

high across result, around these we have the volumes. confidence a As degree expected price a of increase XX% average

remaining at the of uncontracted guidance lower has in the assumed market the of prices on saw average our prices XXXX. lithium end always the than we XXXX For volumes, XX% will be

lower been entirely dealing of forecasts have the consistent we how so XXXX. are with price market And

commitments, walking metal a product chloride line XXXX. increase XXXX price of elect still carbonate a us a or to even hydroxide, realized our we price versus firm in We continued wide market into butyllithium. in additional upside average or Therefore, range as scenarios. expect we in and retaining see move to XX% prices focus fixed of expose flexibility for between to on, strike higher allocation which market while opportunities the balance XX% volume price XXXX allows to

offset To our conclude, our lithium in Argentina, and and to biggest temporary as higher costs XXXX, mentioned to drivers margin earlier, production enough anticipated The average improvement. prices, higher in costs due incurred higher are of royalty this not we continue to units. to increased commissioning new expect although expected payments

labor, soda higher We energy raw also as although materials, for as magnitude year. such same continue not experienced to the last for see ash, in and costs

the call to turn I’ll Paul. back

Paul Graves

Thanks Gilberto.

of last It anticipation expiring market the in became impact many to than lithium quarter the first elevated industry and demand, spot lot prior cell expected China, in had of year, producers especially fourth that the attention China, focused built on subsidies. A inventory quarter of prices particularly lower in in on clear it lithium in the the country. demand on was in

usual first slowdown, demand the with the over quarter, last experienced saw we’ve seasonal lithium few patterns consistent In we the years.

However, the higher the than as the we was was worked greater expected therefore magnitude reduced built quarter procurement this cell and their production inventory producers in fourth year certainly through accordingly. and

applications largely show applications installations did and It’s is continued in like not stationary electronics energy for and batteries based note business. quarter, both first that storage decrease important in growth. applications a demand during to year-over-year significant storage LFP saw also the carbonate battery vehicle continued We weakness consumer electric which, to

be versus in demand down recent notably to leading most output and international first in in notably China and continues much Japan prices greater average in saw resiliency most prices This quarter China, full is in producers in helps most levels. carbonate non-China regions. and about pricing therefore was This down demand benchmarks. by these were of Battery, from cathode lithium LFP some with supported healthy. carbonate why the We production outside severely hydroxide cathode China Korea positive and to impacted. XX% in quarter, commentary monthly the explain

on entire storage view in of of not access supply compliant key global resulting continued drive production of leading spot continue use greater China that is the to important, reflective focus relationships. to emphasis to and the IRA factors are maintaining while existing China, These that supplier areas battery quality standards energy be in chains, Outside market. for come market

notable already Coming globally. see have begun out improvements the first of we quarter, in to demand

government assembly China, and every a begin subsidies the central on basis the of the in to a end increased at XXXX. despite year, Specifically sales the both month-over-month and year-over-year month of EV end have

near-term predict, for a that that points comfort prices are levels. While us there is implications retreating few historical to pricing the give back are lithium challenging to data very not

declining in current the impact where for economics resulted few China, shutdowns in cost many non-integrated prices, on as same pace converters cost We China have the market converter surprisingly, already Not lithium spodumene not price high of we’ve this the converters. lithium months. the producers in levels last of for negative at seen seen

that expected that carbonate have outside reporting last Therefore, growth prices to levels you China. to matters, all week reduction cathode to more in reported again. brought the of normalized prices those producers when demand seen back to demand demand. be continues are activity to pleased already inventory aggregate doubt lithium no overall increases resumes quarter expected, first that price and of to And will inside you agencies and in spot increase Additionally, and levels continue production have and production appears several are for as believe lithium therefore levels compared as ranges spot that cell

based. and analysts that industry becoming year. the Demand lithium We growing have than broad our half occurs EV XXXX, batteries U.S., thirds the global two lithium-ion rest EV in of annual year-over-year also of consistent demand in almost much for is the with from other Bear faster applications combined, China. Battery demand of reduced in passenger Europe world a is second rate for participants. mind and not the expectations many at demand in historically, more

Additionally, in demand year-over-year XXX% increasing quarter vehicles, increased today stationary applications, despite to at application total lithium-ion to demand electric the XXXX. a to of forecasts. China, expected than rates be faster all demand resiliency storage broader passenger for the overall This diversification further adds in massive in is growth the XX% slowdown. EVs EV battery Despite first on are the growing and geographic close battery

linear the any prices new are data certainly over As fundamentals in we’ve lot always long-term move we periods. a growth commentary. points meaningfully that But be different recent is and said that demand don’t unlikely to than around our could past, suggest see would shorter

delays further side, of approaching supply the On oversupply expansion view broad to and that a or see meaningful we any challenging sustained continue we’re disruptions, lithium.

supply slated cost there been line to announcements XXXX, of in new on multiple is increases. and delays come there While have

activities. on see or periodic we In as energy environmentally unfriendly around China, challenges mining well continue illegal crackdowns to supply as rationing,

flagged local skilled fall curtail China, high prices production in expansion has converters been lepidolite As repeatedly meeting targets nonintegrated for their current output. as carbonate cost a bottleneck labor goals. Globally, for and on

we’ve making Additionally, several uncertainty the and multi-year in investments. seen large the political in effect regions capital impact on confidence it very of has

amplified higher, supply updates our the localized costs producers by the building to Finally, demonstrated the ranging of projects. desire chains being established climb further industry, assets or operating speculative These cost marginal grows. to more continues recent lithium across as from higher are and as for

up support Given with enough over growing to to the need will volume our the for expected unprecedented high be economic future, the in need to industry required expansion demand. investment keep returns foreseeable

On as rest from you move slide through what this on X, I’d like Livent we specifically Company to of year. expect the on focus the should

anticipate expectations financial of in performance guidance, improvement year by strong. the full profitability remains cash over for our increase the generation. As flow a reflected significant we And XXXX and

realized and it quarter today. than our higher first average prices the when ago, increase was three higher underpin in our we decision Livent’s realized to months our that guidance set was pricing expectations guidance range these

greater While our markets the in prices, that And China, in in decline in, not do than we in quarter did quarter. China second first forecast seen we particularly so and the anticipated any have in to not lithium carbonate the the also carbonate a do than had we were actually expect better reference assumed. be prices participate clear, in lithium sell to certain

customers the demand reduced from We year. full have signs of seen our no for

remains lock of them expansionary commitments a us longer our given volume especially time, on continued larger future from focus lithium and hydroxide In seeking for fact, in and incentivizing multi-regional, current period to capabilities. investment, over the

XXXX investment. Argentina unscheduled respect in in We metric production, XXXX. tons. that ton Argentina a quarter, remain capacity a second of XX,XXX of phase result our XX,XXX capacity, being the carbonate ton XXXX, After lithium multiple all to carbonate by completing nameplate complete This as expansion metric our deliver double of first in be of With the a we to to result expansionary from expect of years XX,XXX will of metric of end approaching expansions. lithium benefit Livent volumes, announced the see first our years, sequence incremental the will will first the in

progressing hydroxide facility in on location Outside XX,XXX of a is and of province a ton construction in Argentina, metric lithium new the China. Xinjiang

can total this XX,XXX expected increase versus capacity an from XX,XXX global And believe tons. unit XXXX on it volumes higher, LCE production together, metric to XXXX. XXXX. we Put metric in roughly will or are be total basis lithium commercial in First increase tons our XX% hydroxide

the engineering progress Beyond on XXXXm planned hydroxide additional include as continues Livent to lower well carbonate use lithium ability Argentina, a additional work to in expansions and recycled as that evaluation as grade feedstock. expansions

this share of fronts We further these all on details to year. expect later

for of Increased future growth higher generation Livent, driver be flow pricing significant assumptions. that production meaningfully of will more Company wider a cash financial will for is much balanced which in the range result a around

XX% integrated an Livent which The Quebec, project advance. development of shareholder, hydroxide in to continues located Nemaska in Lithium, lithium Canada, is a

Bécancour production. at of Nemaska Lithium hydroxide I the continue mining of approved the As metric into and XXXX the facility Commercial acceleration full spodumene of ton mentioned operations are construction to until Board in XX,XXX start earlier, sales the and hydroxide begin Whabouchi. concentrate of facility of comes the at expected

half lithium year. with a released second First will hydroxide second study be information along expected in production details this project quarter the Lithium of of to in regarding by of and XXXX. be the is cost supporting Nemaska the provided Further expected feasibility

appointed Livent to Nemaska that second commercial customer technical and Livent expects a quarter. and announce sales behalf. Lithium, to continues be position to Lithium on expertise marketing and in in will initial in efforts provide agreements its the significant engage to Nemaska has been

mover be green advantage Nemaska for a energy Lithium continues a cost and North to ability take and region. a highly advantage localization, location critical project of first and strategic attractive to in hydro low incentives the to various America, government customer electric access with in

committed production. For all to of amends into helping reasons, Livent fully these bring it

to quality expansions to by to high will a lithium success supplier be customers. determined ability continue Livent’s deliver to be our reliable on our materials of and

at existing extension BMW the of the amendment of an supply agreed and start agreement. this mentioned I Group As and Livent call, to

will delivered contract per the projects. in year extended this providing total also and support, increase continue and in lithium of part initiatives, Livent duration. was and closely together hydroxide mutual for technology expansion resources sustainability and work various BMW to regional multiple including volumes while As areas,

becomes for is between We true the a can industry, provide relationships model believe for lithium our battery more supply as our OEMs closer important. to should and capabilities additional for suppliers This need material these that become business. a reliable only differentiator customers beyond growing Livent

latest our operations. aspects to hard We all transparency, Finally, delivering dedication annual in second highlighting the work and sustainability our report employees be continuous commitment to ongoing improvement and Livent will quarter. forward and citizenship, of corporate look corporate the of its in our

to call I turn for back the will Dan now questions.

Daniel Rosen

Thank begin you, Paul. you Rob, now may session. the Q&A

Operator

[Operator Instructions] question comes from of your Loop first from line Capital. And the Chris Kapsch

Chris Kapsch

to a reflective of if quarter. maybe curious complement even function no from look was demand for on of what guidance demand sales demand, was carbonate if mentioned commentary guess, the You looking and I just hydroxide and tonnage you more steady the you. -- somewhat it trajectory for carbonate steady, selling no more about the for at pricing then, just opportunistic the your that as China? I And into that your demand, increased China just your carbonate prices holding backward in of Thank based question, customers of just of in notion thus continued divergence, LFP spot is hydroxide? or was currently

Paul Graves

China. carbonate We to is like Chris. to tell. QX, of to didn’t we Thanks, carbonate, hard Frankly, didn’t What Yes. year outside very volumes in did any was customers the we have sell second and sell small half sell. any

these actually it. be commercial lithium today, because qualified, line qualified, of levels need course, is this of carbonate can’t the at enough feed fully have to carbonate to customers clearly you that levels. which But and get don’t being have need plants coming hydroxide they’re is qualify on running the we not we to to for We objective capacity utilize plants utilized until

a piece have then the processes carbonate finish hydroxide that qualification started. plant, to And so they because to plant. it’s will the already need we first, new carbonate And

say, of depends. it of tell that I’d to sort you all

carbonate. point issues carbonate this time. the qualification we delayed hydroxide, is But either in right that, at enough outside to or entirely sell lithium second of half not be objective the China. volumes year for are other sell it into Our the I’m about China, we’re the there if small in would are to here with reserve is markets deep sure there’s -- whether any there not talking

it’s optionality. plan. ruling predictive we that that not I’m carbonate be base out China, that’s although today. that our hard in again, not to retain Again, we So sell purely

products. other pricing will on in other well. lithium Our not guidance what our our large not as to and pieces certainly bits butyllithium a is and have But absolutely upon it’s sale business in as based plus forget, assumption be, we hydroxide predominantly carbonate a Don’t China. any predicated region,

Chris Kapsch

it. the And from around coming having then your hydroxide Thanks. anticipation from comment where with That’s Got the you you. just Bessemer details IRA. just feedstock is Argentina. Thank some from compliance emerged if could, Could for you City? IRS your the more on of

Paul Graves

Yes.

compliant. Our understanding the city and and best has always the in hydroxide is IRA been fully remains

Operator

question line your And a Christopher Mizuho. comes next Parkinson from of from

Christopher Parkinson

some and be So, of benefit ongoing -- let’s you’ve have throughout should that’s terms Livent’s say price nice been in legacy had a XXXX. AFPs lower contracts rolling off

you when and how of more versus sense better should what that go spot ends fluidity that of your a forward think about terms be we of Paul, kind thinking -- Thank a there’s you. Just on a you’re think get to just strategically about bit investors basis? will balances do and how contractual going little in when

Paul Graves

I contracted I sales. But that first. Chrises the to -- think contract what looks remains be Chris. always has think is largely all Look, way objective of out the Yes. Hey like our Getting changing. been

pricing think how of any a start will. of both I fix do the happen. us with the just I the at And have anymore, that talked mean year that of always within going think won’t But much that’s down I sit But predict doesn’t those multiyear given to the we about don’t we reserve don’t will contracts if year, can’t before, multi-year see want to I contracts, will flexibility we’ve it. customer for to then, price and really happen. fixed contracts. As it

be prices, gives I contract that that think happy the does, a They’ll cannot it because fix it can’t if a some customers contract multiyear have contract. they need. that will be to their commitment them recognize

to Everybody’s we’re And doing referencing willing so, have they’ll And what comfortable that’s market be contracts. really quite that. seeing.

Not everybody wants way. same to price them the

I based that’s our ability do the the on on Others do indices. capability really to have to think market. we annual pretty price started go increasing short-term the into to Some an future, with want revisit an But basis. market to move want the as And much we’re XXXX. prices market what resets you going in

Christopher Parkinson

mentioned own thoughts Can add you optionality your remarks, asset ongoing simplistic prepared just give and base? matter? the think your means very you how updated Thank just process Nemaska’s you in a thought you geopolitical What much. just on us and so further about could some obviously And to Livent any considerations. you

Paul Graves

Sure.

government lithium We’re anytime to industry certainly the not soon. the expecting of Quebec nationalize

they’re we W not North Argentina with So, South they’re well-known, So, horizon. the America, Americas the not challenges viewed ourselves the as reasonably America based threat Chile, a feel of have have The that’s We’ve predominantly in trend. but very China that a that’s same challenges as thought a challenges been as right? are same always the in on of not we Argentina. business. comfortable are that Australia. And comfortable frankly, long and or Canada, the experience in operating of

the is who our our in also, resource read resource expertise view anybody We down continue there relationships -- are and And deepest. world as class, will Argentina our to experience understand. report

when diversify, Canada, I But comes nobody and single risk, resource think wants Canada U.S., expect always have potentially the line. in hydroxide in country truth single in concentration going Nemaska in but the is, still hemisphere, will to capacity have concentration, And that particularly having with going absolutely on we’re we’re in we Argentina. to even northern the to others. really and

Operator

next of America. line of from a from Matthew comes And Bank DeYoe your question

Matthew DeYoe

asset fixed margin from starting as second bit of XQ to the to help one move size XQ decrement Argentina? we about or absorption Can the you cost think XQ the the frame half, up as in a the from little we

Paul Graves

with you can margin the help I point. sure not I’m

margin those the costs. looked In of fact, percentage at really direct not impact I’ve

coming QX we’re you’re going want to we’re so in once costs any of see the add you production, don’t But those QX, startup to first to hit up QX, more of cost them specifics ramping inefficiencies. Gilberto, in know think more get clearly and still and come you I producing that. I whether and

Gilberto Antoniazzi

Argentina. Paul, starting of No. more having impact QX, expect has in even on up costs Argentina, more and And we more start we will actually to more we spot the in I there as in we cost. impact -- exporting because on, start more both we royalties pay think QX and QX, in Bessemer as also as productions, BC, well, City an you’re which our ramp

Matthew DeYoe

is guess are for I to pocket the side then, we And about Nemaska, is XQ And on commitments like we looking at? what the Nemaska more will Canada when of look the what might this hear offer? out that maybe of what funding equation, or willing

Paul Graves

able of the or I which Quebec Look, to very even Quebec, the on us. XQ, The government and of of are funding XQ, deliver think would fund on funding arm government. it’s be significant. significant commitments providing go Yes. it’s it’s processes commitments order are funding but in Canada not still an government is that’s But They’ve really hope -- they to And that I obviously their made investing in to XQ. some need commitments through to there

in that et of in around beyond think I cetera, other conversations we’re government still that. funds, terms

be Lithium’s engineering will file of conversation. data there for their it’s report a At lot out in point, this Lithium information is and I it think easier much see Nemaska to to their you XX-XXX easier It not Nemaska report, them that have release, should ours. that when certainly Canada. -- becomes

we government others capital the from on from clarity and Clearly give capital of for timing as what an get update you of and we be. contribution contributions exactly the then et money, will quantum cetera, IQ and on can Livent’s that

Operator

next question Blanchard a line of Deutsche Corinne from comes from Your Bank.

Corinne Blanchard

would be you mean? one Group. for mutual you new does equity Could mentioned bit first BMW that the that expansion BMW Could for the think, what a with little share that And in can assets, be The support interesting, stake on would remarks project. mean the helpful? I

Paul Graves

we’ve not requires. financial what certainly BMW, the them large operations What and it’s of spent they for have operations lightly. Argentina, sure understand And talking operations BMW look, and we’re years, many don’t helping Argentina you No, time been there talking expansion here partnerships they in in know, our down is, a we’ve lot I’m U.S. really these and about make Yes. as commitment. large have

a practical lot describe regard doing it we’re us with how validating doing, in of statements our we’re local so, frankly, And to with help, particular. with conversations of sustainability what many helping authorities and

there’s So technology some pieces. really, then and -- it’s

have state we technologies As the helping you and some technologies. know, current batteries we think lithium BMW’s with do conversations we lithium ongoing that have next state technology solid transition arm could between be the some state, and those about

investment, certainly to about So we’re being some here. as it’s really That’s co-investment. kind not talking quite interpret you capital want investment wide of financial ranging conversations. I not certainly this would what

Corinne Blanchard

the the question then on was other guidance. And

obviously, to business at So you the you look XQ, But good able the XX% street. I that if provide were think, the very have guidance. you in

here. cadence to about trying the for of the year rest So the think earnings

Paul Graves

that one so, think we four than first to tried I for been been pleasantly messages stay achieve we’re and where the of are have thought get across fundamental would. to we assumed Look, never we for was But we hardest QX it year, people was, longer is it to the saw never the we’ve higher analysis And going Yes. pricing have pricing the to people right? in going saw we the of QX assumptions thinking that levels of pricing that surprised. that guidance. part same, months our pricing the is stayed And

full our the certainly not higher realized expect And sales. average realize continue we be prices for than expecting so, price non-fixed while we’re last much on still to prices year, to year to

key first spot the call And large of half you might Now, available amount. we don’t what to sell be really markets. the just year, huge this that a in the fair, a volume not to getting -- guys it’s remember of into to amount have

talking saying to we and it’s the going quarter And know prices will more we a think basically in exactly say to that It’s combination to really than up to going But market second market, were quarter be. probably stratosphere on prices of even of predict the we is being QX. QX back are be saw about be. the QX the realized of basis to difficult a higher in fair half in last difficult year help it’s go I given year So, cautious to or our they by year prices in with some the as what full half predict lower guidance in where year, the costs our it that what performance. we’re is you directly QX are way not with we’re prices to why about relative the combined think of

Operator

Your next from of Research from Vertical McCarthy Kevin the Partners. comes line question

Kevin McCarthy

as in can formulate of the demand regardless EV you have required do has guidance, that to mind case it particular that is the of annual the reason? get Paul, so feel EV you your your fluctuates how constrained growth you guidance, demand there, that’s you a or hit volume level within been

Paul Graves

EV draw They prices. always, that Yes. certainly think demand I as thing long first the you of QX, Look, linear I lithium term in would you’ve ours. short-term analyses direct is relationship drive a between can’t seen say and

said, we I what if as ourselves, had For we Xx we today, capacity. sell the could make

not constrained. are demand absolutely We

absolutely are supply constrained. We

we big how we year, going what short-term. But and does investment frankly, to not at mix, demand place be, customers our and our decisions, and and demand is into our given into factors major And whether forecasts. It not it of know to is it’s mean, a calculate we the the customer factor our guidance. factors carbonate, into material -- it’s so, not we firm a driver big a are business. our product when start what our our short-term, have of know, Kevin, driver estimates market more customer guidance in long-term year, in the what I more surplus hydroxide, to factor when total committed bluntly, have mix. EV the want already is price who is, any all targeting -- It to in we into

Kevin McCarthy

the the trajectory, price flat, your or expect to back outlined? down to Gilberto average first that to realized relative quarter you coming quarter, then up construct selling would prices trend second And XX-XX Okay. given

Paul Graves

really between any basis, a difference Yes. quarterly We because can change evens to all through to mix, given a product can quarter, mix, of out of in we quarters, price, and don’t want that And as because customer don’t year. as know. I realized average get guide the because into timing it our habit, make you it on

thoughts quarterly So on year this, focus tend to we full thoughts. on not

Operator

next from Cowen. line David the comes question from Your Deckelbaum of TD

David Deckelbaum

a guidance touch the the beat just in some in those for just And I to higher you I when of was hoping you this just fixed quarter, when price XX% pricing ‘XX the expectations pricing prices, you negotiations for I first XX,XXX fixed guess, is ‘XX the contracts and the versus fixed in on first contracts to set XX% XX,XXX overall, guess, year then, pricing guidance ‘XX? put for I on bit that fact on last that still year. came that quarter. reflect that LCE, agreements? fixed beat I that this in roughly in tons guess, the guess expectation think to quarter are think up that I context, would the or price conservative that in be did

Paul Graves

-- is. that. to change the it or no XX%, give there The take Yes, XX% was came in

year-over-year, are that’s for any of XX%, XX% to pay volumes As take But are us. committed we predictable And prices be a can at XX%. because change the not in or that number. locked again, set. in said, mix customers it’s it, going There’s between variability kind pretty the there and in on

really went we with price that was products it of non-fixed whole little price But It we expect. And our favor of didn’t bunch sell achieving our not bit we just that book higher products It’s other other as which a a QX of well hydroxide. business, were realized is in too. expected. in than costs that beat was favorable so, more in the our lithium

outperformance QX market than And so, the we’d prices expected. by really in driven was higher

was QX we I didn’t. and were. thought was that But have in. and we for we we’re just it in QX. sort Were Plus, too Again, conservative costs of Time space. tell. the rest don’t will that prices we appears a know be of estimates? said, clear, we QX benefited We really whether too our It complete that never helped expect just timing some conservative I year. the us in really in to didn’t QX as QX, factored in anomaly

David Deckelbaum

volumes in contract, BMW the change that, The indicate how through and delivering wise, much And outlets? contract. with is to side, percentage second mechanisms guess, all? Did then pricing on that ‘XX? to the it I able one tied the going for that be specific geography you me you’re from is on just to BMW ask hydroxide this extending increased is more specifically the are congrats or at lastly, on to conversion agnostic

Paul Graves

So, first question. of I on your part comment cannot unfortunately the

an change to chain absolutely compliant our On also use evolve, It’s today. supply contract to describe Like with when today, U.S. our explicitly BMW production it that chain have not years, Not them able in evolves, wants next is rules designed as wants right? manufacturing their as This where I we’ve is next to contract from evolve we designed they the have everybody’s for to set production I years. changes, several that a actually way second over based IRA evolve. wouldn’t The to U.S. hard supply them stone everybody allow as But everybody part, and their agnostic. with the and think in few the can. capability us.

Operator

BMO comes Capital from from of question next the Markets. line Your Jackson Joel

Joel Jackson

that disclose lags, as last other Like I not know indices? with able Can deal as have But environment happened you to I in any BMW differently to you’re indices, Actually, possible time color question the reopening changed how last yes, us you’ve too think And period, the this much what’s mechanism, a to going about, of pricing give indexes, I wanted the is because since things the be Thanks. here different been negotiate peruse contract? to things bit can you specific key you that what more group just signed customer. would able to talk now, please, Paul? in terms.

Paul Graves

relatively because on procurement the mentioned. any -- of entire been ask supply is It’s almost never exceptions, an never really to been immature actually has for those mechanisms, What really and focus fit chain you or purpose. a the one particularly it our interesting and that, for the Right? where industry, points is two you for would hear one here lithium we have just actually that hydroxide focus

fantastic be amending we down truly whole We down partner are us. try so, multiyear purpose we who BMW, is jointly extending long-term, and And of to us with and for challenges, we and openly have, sat reinforce what we what believe really solve And they a sit partnership. a will challenges, we’ve share have and the them.

And some about how them help constraints flexibility and from a a do to long to with actually lot the to right? we chain, -- the so, free Packaging in if we’re been help end supply much The chain commitments. ask supply in up very more it’s of them has the have term are life. specifications lot actually lithium precise, of that selling supply it commitments, it. get going It work more automotive shelf very precise. a And OEM. to longer that hydroxide and other is chain There’s doesn’t constrains them we the

really create and parts the or hasn’t It been that of just for relationship today’s not what is market or fit about supply indices those consider any it large is done here what market to not of and evolve. allows type so And we’ve a pricing particularly for of I all of really topics, just really it’s conversation. be sort to tomorrow’s

Joel Jackson

Okay.

what them, a going for week, and What follow, pricing. that data follow -- every started I turning weeks. some -- to to contract got prices different the you’re indices have following a informs for know have have -- of all you, you’re matters been weeks? in prices in that the there’s to of all point points coming the matter you call you’ve Paul? the types But price made futures have that turn you the look, for actually up that they’re we when early of So, pricing some up pricing several and lots exchange you of you different decisions Like, have make do

Paul Graves

Yes. to Joel, give is, business. really China spot not the is really not Look, an important I’m still I’m prices does it which I’m unsatisfactory actually not impact directly think carbonate I but sure. sure. you going answer, our a price,

quickly through gets of bleeding we of that right. ago, from was spaces, else, pricing other a years, We hydroxide other was how have sort single out whack seen, what last lithium few did at whether what the or carbonate for into couple went and roof years as moved me effect with whether of in China everything it metal, surprised was any saw carbonate When index in people the it that the the time.

and indices. we not large And specific of sort some its -- contracts at hydroxide it based try our look of really customer we do entirety. so, We price typically industries. carbonate it’s indices, off try They’re -- and in

do we today. our small So, at of look them. It’s a volume relatively part

become in that they these much they I’ll will call prices, really don’t how are market as and in how actually interested but reflect more I’m more understanding important. accurately moving to indices they’re start today, as it think I you move because direction. what

years what from I a you of reflection think accurate really are average see prices of a we’re that them business. realized couple in what us being away for actually of still the might are as truly those

whatever answer going the sort have the them activity them activity really So, do reference. I they market that to think I’m enough what figure they substance trying whatever And I’d reflect question that’s pricing point to of actually to all. is, of at on I’m on, they and do product in level your what watching out, start

Joel Jackson

as your pockets know do what decision, other about But may talked Canada’s lack offer to believe. been out exploration and have spot one a to they But the more Paul, all surprised, of XX%. inside sneak my funding as partner. the in and in you doesn’t the been money, investor, have if surprised lack consider it’s the Canada? tax lovely month an I in. an have you, Have really, Prime Quebec help government they and which surprised we with Quebec Minister, want the Have I and here came you credit been for so about of investment funding making of investment I only,

Paul Graves

ambition support. I’m actual that a direct not in there’s think up yet lot I with lined Canada, it of and entirely sure they’ve

view government a found think -- the natural if to is to Quebec my cell to they I quite their -- way quite certainly money willing I resources in don’t don’t they industry, battery you’re certainly how They’ve the of chain. the own to -- right? going advantage. supply they understand support from think good yet to have. maximize is understand There the plenty you they

the with to be the of develop project of looking honest, intention remains, hydroxide vast vast majority no people this plants. building them Let’s of majority in Canada a

get exported. ever So, that’s going only to

they a always the to but Nemaska and And as them. going an broader I of evolve context not important support think battery is a market chain their is the is see evolves bit for then And their been space I evolves a a very, us today thinking I has How direct not trial as provide think help And so in into attracting learn. Lithium that’s lithium of hydroxide opportunity well. view they them Canada. as My view today. how as think necessarily to

Operator

Markets. Your Capital Keybanc line of next question from comes from the Aleksey Yefremov

Aleksey Yefremov

tight should how lithium market year have kind of you demand on, much demand to depends that’s like or Do keep lithium tight? this this numbers expect you mentioned lithium year you this grow the growth assumption a market Paul, year. this

Paul Graves

Yes.

I depends while. I’ve a for yet. -- think it’s it don’t it changed said I

ahead tipping so the in so too for case on But a demand some get demand lithium for think think the applications. applications more demanding products far I supply will, -- stronger ICE not reach I by still. of vehicles. hydroxide, the be terms battery to other what with limited is don’t over out in other lithium the where of for year going certainly is explicitly getting move really few less number, we’ve maybe really years or hung bit of little certainly or buying last of a perfectly It’s basis I lithium secular where percentage it’s the I mean, nickel stronger drivers and And and on some in to in some up hydroxide, if play, fundamental with what honest. line demand of next to the the is just be high not are point of pretty we demand, you two. supply keeps EVs seen people demand a it’s quickly, -- sort you

is And so quickly everything to EVs. migrating really, really

IEA by think numbers I this sold were EVs. of out XXXX of coming I they why thrown cars half out globally think know the I been have there data. mean, some came all with data, be but with I by out basically some don’t saying will they’re

little metals of speaking, But that’s know by don’t think a constrained demand think whole I carried -- or a found that not is little away, getting because generally a we’ve we supply. there’s cars certainly about. I many battery bunch sold, being are

Aleksey Yefremov

you And on correct? And mentioning next that I so, you that expect if year. prices higher then, perhaps? could Is that I expand pricing, on heard think Gilberto

Paul Graves

that. didn’t that. Yes. hope didn’t clarify say I can hear I And I we that.

up to price be significantly XXXX. expect is We’re certainly not we’ve making forecasts XXXX. said us I mean, in what we volumes for for

Operator

question from And Molchanov next line Raymond from of your comes Pavel the James.

Pavel Molchanov

rather gently alluded You I risk in political suppose some to jurisdictions.

will Chile to just Chile. the to encourage let in ask the them, the similar? in Do about been room response governments if considering proposed think have of So, fact, you in same elephant me the something you the they consider discourage or industry’s nationalization other

Paul Graves

Yes. either. think it’ll don’t I do

care too that. think what I do about industry say, or much think down necessarily to response the doesn’t who’s of participants the anybody go nationalization in path willing to

I production, a many, going require funding a that where not only what own somebody and of comes or I’m country when Mexico, look a private about think it loads of development on be looking huge private piece at to just as look for It’s more that actually are taking piece at really country and line. a you closely players, to nationalize and with resources, but risks like established got one private example, thing and which to of Bolivia the that you’ve capital it no to has or projects, to has expertise -- to industry the a that. can either many approach. two of all That’s Bolivia that same like Argentina brought say,

barrier you think beyond into cetera. how can so, into when has, of detail -- this And the what get means we provinces, federal what really think system, do. the you diverse think different, But et that is we probably even than it’s Argentina young, all don’t cetera, Argentina all like relatively very -- have of or when a we the get what the et a bigger I number going I impact completely a nationalization probably all but that, participants,

Pavel Molchanov

Nemaska. about Follow-up

this for you’re Can will in holder. a XXXX? that XX% accounting remind Given it asset, what us once be starts-up you the

Paul Graves

control, good be held will old be It’ll where equity will we it accounting, and pass it consolidate will control for Yes. If the with test either. accounting. accounted not, then for fashioned as we it be If accounting it.

be Livent. offtake Just will have -- supplying to Nemaska There with own accounted with Lithium, of Livent. will anything have it them. like and they’ll and It’s we of we no for it XX% XX% be Nemaska accordingly. -- agreement will we economics be trade between the and not It’s no

Operator

next the comes question Your from of Ben from Isaacson line Scotiabank.

Ben Isaacson

Paul. Two you, questions for

then and is a question. macro portfolio First question a

that well. cartel, some in about kind is on with you nationalization with name or we’re in lithium, personal OPEC or of on And your terms as of of Can that a seeing. just an LatAm discussions? protectionism still Argentina’s So this heard increased We’ve view going just sticking terms cartel? mentioned this what give is update

Paul Graves

a the strong and not a us just or or country right as to particularly this a battery we a we perfectly honest. that something any to country operating what to for overstate is that think that clearly, lithium of and It is of as of of. regard process. is degree large is owns think is part it development on lithium they’re connotations be other I saying, kind country resources with a I that a these developing sure with cartel way metals resources responsibly metals, for supportive carries wouldn’t quite perfectly resources, make the looking the any cartel multi-country other the Every appropriately around word. -- and with view, them. Cartel a be personal rewarded any of would being valid I cooperation or

cases, And this, country. in general difficult in hydroxide earlier. there. it bring just do built been But is plants the strategy it’s being to all some That’s Quebec that about to and to value what a is for domestic with mentioned others want to trying more has while they do. talked most Argentina, battery it Australia we Chile doing down, industry. go a is incredibly building have

taxes, and coming of future, to so Argentina, there’ll do start duties into resources the make et in actually the more brought are focused, country. the dollars start And we on are in that dollars how they’re a in developed, line, capital export meantime, in sure cetera. export, particularly to the of into much bring to develop They bring from dollars resources. There’s lot dollars in, be these

is it’s way much development do we that and And seen as done how really to have think the how is carefully operators, is value so the important of balance and fair. thinking transparent tend about bigger between by between and captured form is investors, that done with of And them. that I being that all I open and it’s country the an is debate not in in manner much a parties think that in governments, and

Ben Isaacson

of portfolio, and for it, of you up just us describing portfolio, then the renegotiation the maybe And there’s year? way and on remind year can this percentage is what next negotiation a better

Paul Graves

I’m sorry, negotiation? for what

Ben Isaacson

yes. contracts For be to -- or renewed

Paul Graves

to only today’s Yes. It’s a because we tough one answer contract volumes.

new going of with comes do to as volume? what sell keep Are now long-term sort this it it to going to Are going say, are okay, so, on under short-term contracts. and we find markets? customers volume we line, we And we open

contract behalf So each you’re for few activity And or be certainly I’d with new enter doing to a whether years to our to it them? has expect makes to that existing about to of most few be on years, find next going years the into that. sense so, multiyear there customers for next the in those -- talking

Ben Isaacson

I it of Can in years, I portfolio half your basis? different now? just terms tenure weighted ask on the a it a in terms? one years and mean, is is average of the length right is it the Is way? two that of What contract a

Paul Graves

whack made for it’s largely longer getting much complaints much are this and have selling of you now and they do a I longer once the based really that, therefore out be, for right. to visibility too but But when that -- No, years. used than for have about to we qualification never think contract, just sense am point pricing I Where the anymore. these the much years price really processes, we longer it’s than never right to move customers you each demand or contracts were life down with market start and it with earlier, they get and more don’t about in can’t two typically longer. got wrong fixing way to think you the for past, into two a and price contract, go you makes a of three couldn’t to operating sitting of other customer before. or the than Look, plans, much you long then how partner sort efficiency

it’s safe think say. to probably I

Operator

turn remarks. to back some call all final Mr. I’ll we time is that have the over today Daniel questions. closing the for you for And Rosen,

Daniel Rosen

Great. call available Thank have. have any evening. we everyone. call the questions to good the for will all you. today. That’s Thanks, a that But And the following have be additional you address may time we

Operator

you for Thank call. conference today’s your concludes participation. This

You may now disconnect.

Livent (LTHM) 2 May 232023 Q1 Earnings call transcript