SQM raises 2024 lithium sales guidance

On 23 May, SQM released its earnings for the first quarter of 2024, announcing total revenues of US$1,084.5 million for the period ending March 31, 2024, a decrease of approximately 52.1% compared to 2023 Q1. The company reported a net loss of US$869.5 million for the first quarter of 2024, whereas it had a net income of US$749.9 million for the same period last year. This is primarily driven by the lithium segment, as the average selling price of its lithium products decreased to US$12,600 per metric tonne, offsetting the benefits of a 30% sales volume increase of 43,500 metric tonnes compared to the same period last year.

SQM expects to produce approximately 210,000 metric tonnes of lithium carbonate equivalent (LCE) this year. China will have an additional 10,000 metric tonnes of tolling lithium hydroxide production from lithium sulfate in 2024 and another 10,000 metric tonnes in 2025. The company states that due to positive market demand dynamics, it has revised its 2024 sales volume guidance to approximately 200,000 metric tonnes of LCE.

Questions raised during the Q&A session touch on SQM’s vision for the future lithium market prices, production and inventory management, as well as the negotiation with Chile’s state-owned CODELCO, which is expected to finalise before 31 May.

Regarding the price, the Executive Vice President of Lithium, Carlos Diaz suggests “more stability for the rest of the year” as the price fluctuations “were quite moderate” earlier this year. He further shows confidence in SQM’s ability and plans to “sell according to our capacity”. When asked about the CODELCO negotiation and Tianqi Lithium’s presence on the board, CFO Carlos Diaz provided a measured response, indicating that the company would follow regulatory protocol and see the board's decision.

Author: Hongqiu Su | Battery Metals Analyst Associate | London Office, Shanghai Metals Market
Email: lilysu@smm.cn