US lithium supplier Albemarle has reported net sales of $2.3 billion for Q3 2023, up 10% year-over-year despite falling lithium prices.

Chief executive Kent Masters attributed this growth to higher volumes in the company’s energy storage business. Q3 sales in Albemarle’s flagship lithium business came in at $1.7 billion, up 20% on-year, buoyed by its expansion in Chile and production at its Qinzhou processing plant in China.

Yet, due to lower lithium prices, the company now expects its full-year energy storage net sales to fall to around $7-7.2 billion. Kallanish notes that the company is also amending its sales growth forecast, now expecting a y-o-y increase of 30-35% rather than the 40-55% estimated in Q2.

Lithium prices have declined by more than 60% this year, but Albemarle expects its realised prices to increase 15-20% compared to 2022. This will be the case if “recent lithium market prices continue through the remainder of 2023,” the company notes.

In addition to lower lithium prices and higher costs, Albemarle pegged the shift on “timing impacts” of spodumene inventory and energy storage. As a result, the company reported a net income of $302.5 million, down 66.3% on-year.

“We are monitoring any economic impacts to the seasonal acceleration in EV sales at the end of the year,” Masters said in an earnings call. “Our long-term view of secular growth continues to be supported not only by the adoption of EVs, but transformations across mobility, energy, connectivity and health.”

While EV sales are on-track for a 40% y-o-y growth, Masters says higher interest rates and a soft economy could still present challenges.

As of 30 September, Albemarle had an estimated liquidity of $3.1 billion and a total debt of $3.7 billion. The company expects capital expenditures between $1.9 billion and $2.1 billion for the year.