NYSE: LTHM

Livent Corporation

Company Description

Livent was spun out of FMC in 2018 and completed its initial public offering on October 15, 2018. LTHM has been operating for over 60 years (including while part of FMC), and has transitioned from producing commodity lithium to higher-value products. LTHM primarily produces battery-grade lithium hydroxide and lithium carbonate, which are primarily sold to battery producers for the electric vehicle market, and also produces butyllithium and high purity lithium metal for various applications in the pharmaceutical, polymer, and aerospace sectors.

Key Points

  • LTHM is a fully integrated lithium producer and “pure play” in the lithium sector. LTHM is one of the five largest lithium producers in the world, according to Roskill estimates.
  • LTHM believes that it has one of the lowest cost and highest quality lithium brine resources in the world. LTHM produces lithium through its brine operation in Argentina, which LTHM believes provides a competitive advantage given the resources’ high lithium concentration, and LTHM’s extraction expertise.
  • LTHM signs multi-year contracts with its customers. This allows LTHM to better manage lithium price fluctuations.
  • LTHM’s largest revenue source is the Energy Storage market, and LTHM expects lithium hydroxide demand for batteries to increase 700% from 2020 to 2025. LTHM’s diversified product offering allows it to sell into several different end markets, including Energy Storage (~46% of 2019 revenue), Polymers (~19%), Greases (~10%), Synthesis (~9%) and other applications (~16%).
  • LTHM is well capitalized after recently completing a Green Convertible Senior Notes offering. The company collected gross proceeds of ~$246M, which provides capital to navigate through the current oversupply environment and market headwinds caused by COVID 19.