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square meter (New York:SQM) +2.8% In trading on Wednesday, the lithium producer said it plans to continue increasing production in Chile even as weak prices push it higher. Review of the “less attractive” markets.
Second-quarter net income fell to $213.6 million, or $0.75 per share, from $296.7 million, or $0.95 per share, in the year-earlier quarter, while revenue fell 37% year over year to $1.29 billion. But it met analysts’ expectations.
SQM (SQM) reported record quarterly lithium sales of over 52,000 metric tons, up 20% year-over-year, but this success was offset by significantly lower average realized lithium prices compared to the same period last year, a trend the company expects to continue in the second half of this year, as current lithium price indices in China are approximately 20% lower than the average lithium price indices in the second quarter.
“While we continue to advance our previously announced expansions, we are currently re-evaluating specific markets and initiatives that may be less attractive in the near term,” said CEO Ricardo Ramos.
While some lithium producers may cut production, given that “many projects, especially green projects, are not economically viable at these prices,” Ramos said on a SQM earnings conference call that his company Maintaining capital expenditure in lithium It does not take into account the current price environment that reflects long-term lithium prices.
“We are very clear that the price will be different in the future. That’s why we have a clear investment plan in lithium,” Ramos said, according to Reuters.
SQM’s CEO said its Chilean plants continue to ramp up production toward a recently expanded annual capacity of 210,000 metric tons, with further expansions taking capacity to around 300,000 tons, although key will be executing a deal to hand over a majority stake in the company’s brine assets to state-owned Codelco in exchange for expanded operations.
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