Lithium producer Livent falls 3.6 percent in market debut

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(Reuters) – Lithium producer Livent Corp <LTHM.N> fell 3.6 percent in its market debut on Thursday after being priced at the lower end of its expected range, as investors worried about the recent declines in prices of lithium in China, the world’s largest consumer of the ultralight metal.

Livent’s debut comes a day after the major U.S. indices fell about 3 percent each, unnerving investors and pushing them to the sidelines. At its open Livent had a market capitalization of $2.34 billion.

The company’s IPO of 20 million shares was priced at $17 per share on Wednesday, below its target range of $18 to $20 per share. The IPO raised $340 million.

Prices of lithium, a key ingredient in rechargeable batteries used in electric vehicles, have halved in China this year from their peak of $24,750 per ton due to oversupply, hurting near-term earnings prospects for lithium producers.

China’s Ganfeng Lithium <1772.HK> sank 29 percent in its debut on Thursday in Hong Kong.

Livent holds the lithium business of pesticides maker FMC Corp <FMC.N>, which owns 86.01 percent stake in Livent, post the IPO which is seen as a test of whether a pure-play lithium operation can stand on its own

The Livent offering was planned due to expectations of higher global demand for the battery metal used in everything from cell phones to electric vehicles.

FMC saw a 46 percent jump in lithium sales in the second quarter and expects to produce roughly 21,000 tonnes of the metal this year. (https://reut.rs/2NwLlcz)

Livent reported net income of $47.1 million and revenue of $210.7 million for the six months ended June 30, according to its IPO filing.

A source told Reuters on Wednesday the offer was oversubscribed.

Companies sometimes choose to dip below their target price range in an IPO to attract more institutional investors, even if books are oversubscribed within the price range.

Bank of America Merrill Lynch, Goldman Sachs and Credit Suisse are the other lead bookrunners.

(Reporting by Diptendu Lahiri in Bengaluru; Editing by Shailesh Kuber)

President and CEO Paul Graves and members of the leadership team from lithium producer Livent Corp ring the ceremonial bell to begin trading of the company's stock at the New York Stock Exchange (NYSE) in Manhattan as the company holds its IPO in New York, U.S., October 11, 2018. REUTERS/Brendan McDermid

President and CEO Paul Graves and members of the leadership team from lithium producer Livent Corp ring the opening bell at the New York Stock Exchange (NYSE) in Manhattan as the company holds its IPO in New York, U.S., October 11, 2018. REUTERS/Brendan McDermid