Albemarle, the world's largest producer of lithium for electric vehicle batteries, cut its 2020 budget and pulled its annual forecast on Wednesday as sales drop amid the global spread of the coronavirus.

The steps reflect the first concrete signs that the lithium industry is beginning to feel the pain of sliding automobile sales and the economic malaise caused by the coronavirus, which causes the Covid-19 respiratory disease.

Albemarle and the broader lithium industry had already faced concerns about market oversupply, worries now compounded by the pandemic.

Shares of the Charlotte, North Carolina-based company fell 3% in after-hours trading.

Albemarle said it is cutting its annual budget by about $150 million, now planning to spend $850-million to $950-million this year, and drawing $250-million on a line of credit. The company also plans to cut costs by $25 million to $40-million per quarter.

For the second quarter, Albemarle expects sales and profit to drop due to the virus.

"The economic impact of the global pandemic remains unclear, but we remain focused on what is within our control," said Albemarle's CEO, Kent Masters, who took the company's reins last month.

In lithium, the company's largest division, sales are projected to slide for the rest of the year due in part to automaker shutdowns from the virus.

The company earlier this year had warned it was experiencing a "weak" first quarter in China, where most of the company's lithium processing facilities and customers are located.

Chile's SQM, Albemarle's biggest rival, said last month that the coronavirus had yet to affect its lithium output, but warned it might have to scale back plans for 2020 if a slump in demand continued for the coveted battery metal.

Livent Corp, another Albemarle rival, is set to report quarterly results next week.

Sales in Albemarle's bromine and catalyst businesses, which executives have relied upon in the past for their steady cash generation, are not expected to rebound before 2021.

For the first quarter ended March 31, Albemarle posted net income of $107.2-million, or $1.01 per share, compared to $133.6-million, or $1.26 per share, in the year-ago period.

Excluding one-time items, Albemarle earned $1 per share. By that measure, analysts expected earnings of 83 cents per share, according to IBES data from Refinitiv.

The company plans to hold a Thursday conference call to discuss the results.