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Thursday, February 29, 2024 - 22:24:42
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Chile’s SQM, the world’s second-largest lithium producer, on Wednesday posted an 82% fall in its fourth-quarter net profit from a year earlier, below forecasts as prices for the key battery metal continued to slide from earlier peaks.
The miner, which also produces fertilizers and industrial chemicals, reported a quarterly net profit of $205.9 million, below the $317 million expected by analysts polled by LSEG, after a gradual slide in earnings over 2023.
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Revenue for the period fell 58% to $1.31 billion, also lagging LSEG’s $1.35 billion forecast.
SQM said it sold record-high volumes of lithium during the quarter, hitting around 51,000 metric tons and up nearly 20% from a year earlier, even as average prices dropped 73%.
The company said it expected lithium sales volumes to increase 5%-10% this year, with global demand forecast to rise 20%, although warned that oversupply would hold prices steady.
“The excess in lithium and battery materials … is expected to continue during this year, keeping pressure on lithium market prices,” SQM chief executive Ricardo Ramos said in a statement.
Global supplies for the electric vehicle battery metal outpaced demand over 2023, fuelling a glut that has dragged on prices and caused producers such as Albemarle, the world’s largest supplier, to cut jobs and pause expansions.
SQM said it expected to produce 210,000 tons of lithium carbonate in the first quarter this year as it ramps up its Chile operations, adding that 2024 capital expenditure would come to about $1.3 billion.
The group’s share price has slid around 30% in the last 12 months.
SQM also said it is working with communities in Chile’s Atacama region as it finalizes details of its agreement with state-run miner Codelco, signed in December, as part of a government plan to boost the state’s role in the lithium sector.
The deal triggered protests by local indigenous groups who blocked roads to SQM, causing a pause in operations.
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