SAN DIEGO (Reuters) – Chile’s SQM, the world’s second-largest lithium producer, on Wednesday reported a wider-than-expected 63.2% fall in quarterly revenue as a consequence of weak battery metallic costs, which it expects will proceed for the remainder of the 12 months.
The miner, which additionally makes fertilizers and industrial chemical substances, reported second-quarter internet revenue of $213.6 million, or 75 cents a share, beneath analysts’ expectations of $296.7 million, or 95 cents a share, in line with LSEG. .
Income for the quarter was $1.3 billion, according to analysts’ expectations, in line with LSEG information.
SQM produces the white metallic within the Atacama Salt Flats in northern Chile, which have the very best focus of lithium in brine on this planet, giving it the benefit of low-cost manufacturing.
However whereas the corporate posted document quarterly lithium gross sales, its outcomes have been weighed down by a pointy drop in metallic costs, a development chief govt Ricardo Ramos mentioned would proceed.
“We count on this pricing development to proceed within the second half of this 12 months, with China’s present lithium value index practically 20% decrease than the common lithium value index within the second quarter of 2024.”
A basket of lithium costs tracked by Benchmark Mineral Intelligence exhibits that lithium costs have fallen about 70% up to now 12 months as a consequence of weaker than anticipated world demand for electrical autos as a consequence of excessive borrowing prices and world uncertainty.
Ramos mentioned some lithium producers might cut back output as a result of low costs make the challenge economically unfeasible.
SQM mentioned it will proceed with its enlargement plans, though it was reassessing particular markets and initiatives which can be “much less engaging within the brief time period underneath these circumstances”.
American rivals Albemarle The corporate, which additionally operates in Atacama, mentioned final month it will minimize prices after reporting a second-quarter loss.
