(Reuters) -Chile’s SQM, the world’s second-largest lithium producer, on Wednesday missed quarterly profit estimates and warned of lower realized prices in the next quarter due to oversupply of lithium, a critical component of electric vehicle batteries. The company posted first-quarter net profit of $137.5 million, or 48 cents a share, compared with analysts’ estimates of […]
Business
Chile’s SQM misses profit estimates as lithium prices remain under pressure
Audio By Carbonatix
(Reuters) -Chile’s SQM, the world’s second-largest lithium producer, on Wednesday missed quarterly profit estimates and warned of lower realized prices in the next quarter due to oversupply of lithium, a critical component of electric vehicle batteries.
The company posted first-quarter net profit of $137.5 million, or 48 cents a share, compared with analysts’ estimates of $171.20 million, or 63 cents a share, according to LSEG data.
The miner said its revenue for the January to March period came in at $1.04 billion, in line with analysts’ estimate of $1.045 billion, according to LSEG data.
Miners worldwide have been hit by a nearly 90% drop in lithium prices since their peak in late 2022 due to weaker-than-expected demand for electric vehicles and excess supply.
After posting a drop in net profit in the fourth quarter last year due to weak prices, SQM had said it expected lithium prices to dip further at the start of 2025.
SQM, one of only two companies producing lithium in Chile, also makes fertilizers and industrial chemicals.
SQM is awaiting final regulatory approvals to close a partnership with Chilean state-run copper miner Codelco in the Atacama salt flat, the world’s most lithium-rich brine deposit. It expects to secure approval from Chinese regulators in the second half of the year.
Asked about recent critiques of the deal from presidential hopefuls on both the right and the left, CEO Ricardo Ramos said Chile’s political environment ahead of the November election was stirring up debate without fundamentals.
“In the end it’s just noise,” he said.
Ramos said that SQM’s low operational costs and efforts to reduce them further during this year and next would help the company hold out for better lithium prices.
“I don’t have a crystal ball, but my view is positive for next year – I think prices will go back to a reasonable price environment,” he said.
(Reporting by Daina Beth Solomon, Chandni Shah and Shivani Tanna in Bengaluru; Editing by Sherry Jacob-Phillips, Saumyadeb Chakrabarty and Leslie Adler)