Lithium giant SQM increases supply plans as prices are higher

(Bloomberg) -SQM, the world’s largest lithium producer by market value, boosted its sales guidance for this year and hit a note of optimism at prices after placing a 28% drop in the second quarter. The firm said in a statement that the core earnings before items dropped to $ 307.9 million. But the Chilean producer of the battery metal is pushing with an expansion and says that sales volumes of its domestic plants will grow by 10% this year. It also lifted sales guidance for its Australian operations. Lithium suffered from a serious global glut that hammered prices, although the output reduction in China fueled a recent setback – although it is still more than 80% below their peak. The firm has maintained a forecast for the growth of the global demand of about 17% this year. “Recent market dynamics make us believe that prices could be higher in the third quarter than the second quarter,” SQM said in slides that accompany its earnings statement. The company’s shares were down 2.9% at 09:37 in New York. They rose to their highest until more than a year earlier this month and joined a rally for world producers of lithium after a large mine stopped in China. The operation operated by battery Giant Contemporary amperex Technology Co. Ltd. performed, must be closed at least three months. Santiago-based SQM, formally known as SOC. Quimica & Minera de Chile SA, increased sales guidance for its international division to about 20,000 tonnes of lithium carbonate equivalent. It did not provide a volume figure to clear the 10% increase for its Chilean division. SQM added that its joint venture in Kwinana Refinery in Australia achieved the first commercial production in July. The facility must hit a name plate capacity of 50,000 tonnes of lithium hydroxide at the end of 2026, with half attributable to SQM, it states. Lithium prices weakened under the weight of the excess supply after new mines came up and delayed demand growth. SQM’s volumes-over-value approach has contrasted with cuts by some higher cost producers. The company has budgeted $ 750 million to capital expenditure this year as it increases the annual capacity in Chile to 240,000 tonnes of lithium carbonate in 2026 and 100,000 tonnes of hydroxide by the end of 2025. The total turnover of the firm dropped by 19% in the second quarter to around $ 1 billion, as the lithium prices in place endured their worst period in many years. Sales volumes were lower than the first quarter. “Some of the contracts we had in place hit the lower limits in the contracts, which influenced the volumes,” CEO Ricardo Ramos said in the statement. -With help from Philip Sanders. (Add shares in the fifth paragraph, capacity expansion in the eighth paragraph) More stories like these are available on Bloomberg.com © 2025 Bloomberg LP