SQM Lithium Q3 Sales Volume Rise 56%

Sociedad Quimica y Minera de Chile SA (SQM) of Santiago, Chile has reported third quarter net income of US$1.7 million on revenues of US$452.9 million down from US$61.2 million on revenues of US$473.1 million in the corresponding quarter of 2019. The revenue decrease reflects lower sales in all of the company’s businesses with the exception of Specialty Plant Nutrition and Industrial Chemicals. Net income was affected by a settlement fee in the U.S. related to a class action lawsuit that had a one-time, before tax effect of US$62.5 million.

Ricardo Ramos, SQM’s CEO, stated, “This quarter, we sold significantly higher sales volumes of lithium, over 40% more than the second quarter of this year. However, iodine sales volumes were impacted by the COVID-19 pandemic, which has been impacting, among others, the X-ray contrast media market, and ultimately iodine demand. We are hopeful we could see demand recovery in 2021, returning to levels seen in 2019.”

“In-line with the lithium expansions we are working on, we are developing nitrates and iodine projects that will enable us to produce more to serve the future needs in these markets, all the while reducing environmental impacts. We believe that the total capital expenditures required for growth and maintenance between 2021-2024 will be approximately US$1.3 billion. This proves that we will not be stagnant, we plan to grow or maintain our participation in the markets in which we currently partake.”

SQM’s Lithium and Derivatives segment reported third quarter revenues of US$95.3 million, down from US$112.5 million in the same period of 2019. Lithium and derivatives sales volume for the period grew 56% to 17,700 tonnes. The company says that it is currently producing at a rate of 75,000 tonnes/year, which will help it reach its sales volume expectation of 60,000 tonnes in 2020.

SQM’s Specialty Plant Nutrition segment third quarter revenues were US$174.8 million versus US$167.3 million in the same quarter of 2019. Sales volumes increased by 7% to 270,000 tonnes. Average prices in this business dropped over 5% during the third quarter versus the second quarter of 2020. The company says that lower prices in the potassium chloride market and increased supply in the potassium nitrate market have indirectly and negatively impacted the price trends in the specialty fertilizer markets.

SQM’s Iodine and Derivatives segment revenues in the third quarter decreased by 19% to US$74.1 million. Sales volumes in the third quarter declined from approximately 3,000 tonnes in 2019 to 2,200 tonnes in the latest quarter. Average prices stayed at the same levels as in the prior quarters.

SQM’s Potassium Chloride and Potassium Sulfate segment generated third quarter revenues of US$65.5 million versus US$73.7 million in the same period of 2019. The segment‘s sales volume in the quarter were 16% higher at 247,500 tonnes. The company notes that average prices for the quarter were under 18% lower than prices reported during the second quarter of 2020.

SQM’s Industrial Chemicals segment (nitrates, potassium chloride, boric acid, magnesium chloride) registered third quarter revenues of US$33.8 million, an increase of 98.6% from the same period of 2019. Volume sales of industrial nitrates more than doubled from 19,600 tonnes to 47,400 tonnes.

Volume 34, Issue 23

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