Lithium miner SQM swings to USD 870 mn loss as oversupply sinks prices – ET Auto

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While SQM’s quarterly lithium revenues fell 67% from a year earlier, its lithium sales volumes grew 34%.

Chilean mining company SQM, the world’s second-largest lithium producer, on Thursday posted a net loss of USD 869.5 million for the first three months of the year, as oversupply of the metal needed for EV batteries drags on prices.

This brought a loss of USD 3.04 per share, well below the USD 0.74 expected by analysts polled by LSEG, while revenues more than halved to USD 1.09 billion over January to March, below analysts’ USD 1.13 billion forecast.

A year earlier, the company had posted a close to USD 750 million profit.

SQM Chief Executive Ricardo Ramos, said that despite growth in sales volumes, the quarter had been hit by average sales prices for lithium that dropped over 75% to USD 12,600 per ton.

“Since our sales contracts are tied to market price indices, our realized sales prices reflect the market price trends,” the company said in a statement, noting China remains the primary market concentrating over 75% of lithium demand.

SQM’s sales distribution follows the same pattern.

“We believe that the strong demand growth in lithium market seen since the beginning of the year could continue for the remainder of the year, with total lithium demand surpassing 1.1 million metric tons during 2024,” Ramos said.

While SQM’s quarterly lithium revenues fell 67% from a year earlier, its lithium sales volumes grew 34%.

The company predicted volumes could climb some 18% to reach 200,000 metric tons this year, compared to 170,000 tons in 2023. This compares to a 5% to 10% increase it had previously forecast, when it warned of a supply glut.

The company plans to continue with its growth plans in Chile and abroad, Ramos said.

  • Published On May 23, 2024 at 12:53 PM IST

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