SQM Reports Continued Growth in Lithium Market

Sociedad Quimica y Minera de Chile SA (SQM) of Santiago, Chile has reported a net income of US$649.2 million on revenues of US$2.43 billion for 2012 compared with US$545.7 million on revenues of US$2.15 billion in 2011. A 6% decrease in revenues from the company’’s Specialty Plant Nutrition business was more than offset by growth in all other segments.

Patricio Contesse, SQM’’s CEO, said, ““We are pleased with our performance throughout 2012. We posted higher sales volumes and revenues in our potassium, industrial chemical and lithium and derivatives business line when compared to 2011. Additionally, we saw increased revenues and margins in our iodine business line. We finalized some major capital investments during 2012, including an expansion in the Salar de Atacama, which allowed us to increase our potassium production and increased flexibility in 2012; expansions in this area will continue and will grant us higher volumes in our potassium products in the future.””

SQM’’s Lithium and Derivatives segment generated revenues of US$222.2 million in 2012, a 21.2% increase over 2011. The increase reflects a 12% increase in sales volume, to 45,700 tonnes, and an 8% increase in average sales price. The company says the lithium market continued to grow in 2012, primarily because of increased demand from the rechargeable battery and lubricating grease markets.

SQM’’s Iodine and Derivatives segment generated revenues of US$578.1 million in 2012, a 27% increase over 2012. The segment’s sales volume decreased 10%, to 11,000 tonnes, as a result of new supply sources. The lower volume was more than offset by an average sales price increase of over 40%. The company says the sales growth was led by x-ray contrast media and pharmaceutical applications.

SQM’’s Industrial Chemicals segment registered a 76% increase in 2012 sales revenues to US$245.2 million. Sales of industrial nitrates increased 53% to 277.700 tonnes reflecting new sales to alternative energy projects that utilize industrial-grade sodium and potassium nitrate in solar thermal energy storage. However, because of the uncertainty in European financial markets and higher financing costs, SQM anticipates project delays. Segment sales of boric acid in 2012 decreased by 23% to 1,800 tonnes.

SQM’’s Potassium Chloride and Potassium Sulfate segment generated 2012 revenues of US$605.1 million, a 9% increase over 2011. Sales volumes were 10% higher at 1.21 million tonnes. SQM estimates that global potash demand was 50 million tonnes in 2012, a reduction of 12% from 2011. The decrease reflects the economic uncertainty in Europe. But demand is expected to return to levels closer to 53 million tonnes in 2013. SQM’s Specialty Plant Nutrition segment generated revenues of US$675.3 million versus US$721.7 million in 2011. The decrease reflects a 15% drop in volume sales for potassium nitrate and sodium potassium nitrate. Average sales prices were almost 2% higher.

Volume 27 issue 5

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