UPDATE 1-Arcadium Lithium profit falls on weak prices

(Adds details on the results, background in paragraphs 2 to 6)

May 7 (Reuters) – Arcadium Lithium, formed earlier this year with the merger of U.S. lithium miner Livent and Australia’s Allkem, on Tuesday posted lower first-quarter profit, hit by a decline in prices.

Global supplies for lithium outpaced demand over 2023 fuelling a glut that has dragged prices, hurting producers such as Arcadium.

However, lithium producers have stayed bullish on long-term demand for the battery material.

Aracdium’s biggest rival and the world’s largest producer of lithium, Albemarle, said last week that higher electric vehicle (EV) sales in China in April, including at major automaker BYD, is a positive sign for lithium prices, but cautioned that current pricing would limit new projects from getting off the ground.

“We see encouraging signs in the lithium market and underlying demand fundamentals remain very strong. Prices have increased from the cycle bottom and appear to have stabilized at levels that are notably higher than what we saw in the last downturn,” Arcadium CEO Paul Graves said in a statement.

The company achieved average realized pricing of over $20,000 per product metric ton for its combined hydroxide and carbonate volumes in the first-quarter.

The producer of key EV battery metal posted net income of $15.6 million, or 1 cent per share, for the three months ended March 31, down from $114.8 million, or 23 cents per share, last year. The results were consolidated between the two combined companies. (Reporting by Arunima Kumar in Bengaluru; Editing by Shailesh Kuber)

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