Umicore mentioned its strategic adjustments in response to battery materials market challenges during its Q4 2024 earnings call on 26 July. BASF also signaled similar adjustments in its earnings call.
Umicore CEO Bart Sap highlighted an 18-month delay in ramping up customer-contracted volumes and substantially reduced volume projections. Umicore will launch a strategic review to reassess the growth projections in the Battery Materials business beyond 2024, which includes strict capital allocation discipline driven by the evolving market conditions, slower-than-expected EV adoption, and the necessity to align with new customer growth paths and regional policy shifts.
Umicore will delay its investment in a large-scale battery recycling plant in Europe until at least 2032, due to slower EV sales and delayed influx of end-of-life batteries according to their projections. The company will focus on optimizing its existing pilot recycling plants in Hoboken, Belgium in the near term.
"We will have a well-utilized global capacity at the exception of our Chinese CAM assets," according to Sap. The company faces a significant €1.6 billion impairment on battery materials related property, plant and equipment and noncurrent inventory, mainly in Asia. But the management did not disclose the specific underutilization level, or to what extent will the company be affected.
“In China, we see a certain, let's say, downside for the fourth quarter [in EV], so not as strong as usual because of the high inventories, ”said Markus Kamieth, BASF CEO and former BASF China Head. Concurrently, BASF is pausing its large-scale refinery project for battery recycling in Tarragona, Spain until cell capacity build-up and xEV adoption rate in Europe regain momentum.
Author: Hongqiu Su | Battery Metals Analyst Associate | London Office, Shanghai Metals Market
Email: lilysu@smm.cn
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