Chile’s SQM, the world’s second-largest lithium producer, couldn’t escape the impact of the 80%-plus slide in world prices for the metal over 2023, with the company’s December quarter revenue and earnings plunging sharply.
SQM is the latest lithium manufacturer to report its capacity for 2023 and, like its rivals, it wasn’t good.
But the company, which is expanding its operations in Australia with 50% of the Mount Holland mine in Washington state and the related Kwinana refinery (with Wesfarmers), expects lithium costs to remain stable over the next 3 months and demands (at a low price). levels, brain you). you) later in the year.
Fourth-quarter profit fell 82% from a year earlier, driven by declining battery metal costs, adding lithium.
Revenue fell 58% to $US1.31 billion, from $US3.13 billion in the December 2022 quarter, while net profit was $US203.2 million, a fraction of the $US1.15 billion a year earlier.
For the full 2023 financial year, SQM saw a 30% slide in revenue to US$7.7 billion (from $US10.7 billion), while net profit fell by half to $US2.01 billion from $US3.9 billion in 2022.
The dramatic drop in steel costs and slowing demand also had disastrous consequences for the company’s finances, cutting into its cash reserves and forcing it into more debt.
SQM ended the quarter (and year) with $1. 04 billion in cash and cash equivalents, up from $2. 66 billion in cash and cash equivalents a year earlier. This fall, long-term debt rose from $2. 39 billion to $3. 21 billion.
After global lithium outpaced demands in 2023, fueling a glut that drove down costs and prompted widespread cuts by manufacturers and explorers around the world, led by rivals such as Albemarle, Pilbara Minerals, Mineral Resources and Core Lithium.
While global demand is expected to increase by as much as 20% this year and SQM expects sales volumes to increase by 5% to 10%, the company warned that oversupply would keep prices stable.
SQM executives told analysts on Thursday that they had no indication of a major lithium upgrade in the next three months, but were optimistic about the second half.
They predicted higher sales volumes in the second part of the year, and SQM CEO Ricardo Ramos told analysts the company could potentially revise its sales volume forecast as the year progresses.
SQM’s Wall Street-traded shares were up 8% at the close on Thursday as lithium carbonate prices rose in China, which also helped Albemarle shares rise 4.4%.
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Overall Increases for Deep Leads Resources: Quality, Tonnage and Target Area ABx Group has reported a 30% increase in its Mineral Resource Estimate (MRE) at the Deep Leads Ionic Adsorption Clay (IAC) rare earth deposit in northern Tasmania. The accumulation in MRE comes from 36 extension wells analyzed, representing a significant northward extension for the existing Deep Leads prospect.
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