SQM Posts Record Sales but Suffers $404 Million Loss Amid Lithium Price Drop

Sociedad Química y Minera (SQM), Chile’s leading non-metallic mining company and the world’s second-largest lithium producer, reported a $404 million net loss for 2024.

This sharp downturn contrasts with its $2 billion profit in 2023 and reflects the significant impact of falling lithium prices on its financial performance. Despite record sales volumes, SQM’s total revenue dropped 39% to $4.5 billion, driven by a 64% plunge in average lithium prices.

Lithium revenues fell 56.7% to $2.2 billion, even as the company sold a record-breaking 205,000 metric tons of Lithium Carbonate Equivalent (LCE), a 21% increase from 2023.

The average price per ton dropped from $30,467 in 2023 to $10,936 in 2024 due to oversupply and pricing pressures in global markets. Iodine sales also hit historic highs, growing by 11% to over 14,500 metric tons and generating $892 million in revenue, an 8.5% increase.

Potassium sales volumes surged by 29%, driven by strong demand from Brazil, Europe, and India. However, production constraints at the Salar de Atacama are expected to reduce potassium output by half in 2025 as SQM prioritizes lithium-rich brines.

CEO Ricardo Ramos remains optimistic about long-term lithium market trends despite current challenges. He highlighted global demand growth of approximately 25% in 2024 and projected another 17% rise in 2025, fueled by electric vehicle sales and energy storage systems. Ramos expects stable prices this year with a positive trend emerging by 2026.

SQM Focuses on Strategic Investments

The company plans to reduce capital expenditures from $1.6 billion in 2024 to $1.1 billion this year, focusing on key projects like expanding Mt. Holland operations in Australia and completing the Kwinana refinery for lithium hydroxide production.

SQM’s payments to Chile’s Corfo agency fell significantly from $1.9 billion in 2023 to $432 million last year due to lower revenues. Its partnership with Codelco for joint exploitation of the Salar de Atacama remains on track for implementation later this year.

SQM’s record-breaking sales volumes underline its operational strength amid market volatility, offering insights into shifting dynamics in the global lithium and iodine industries critical for investors and policymakers alike.