Lithium giant predicting continued strong prices

SANTIAGO, CHILE • Unexpected difficulties to expand production by one of the world’s top lithium miners come with a silver lining — stronger than expected prices.

Santiago-based Soc. Quimica y Minera de Chile SA expects lithium prices to remain firm in the fourth quarter at about similar levels to earlier this year because of strong demand and supply issues. In September, SQM Chief Executive Officer Patricio de Solminihac was expecting prices for the second half of the year to be lower.

“The price that we have seen is a result of very strong demand, stronger than we originally anticipated, and also there has been a delay in some of the production promises,” De Solminihac told analysts during a conference call Thursday. “We are working with our customers for the closure of contracts for next year, and so we don’t know yet what the direction of prices will be next year.”

The world’s second-largest producer of lithium, a mineral essential to power electric vehicle batteries, reported third-quarter revenue and net income that missed analysts’ estimates as unexpected difficulties in ramping up an expansion project hit sales volumes.

Prices for lithium carbonate in South America came down to US$14,375 per ton in October from an all-time high of US$15,750 per ton in May and June, according to a monthly report by Benchmark Mineral Intelligence. Demand growth is expected to be at around 25 per cent this year and, with limited new supply entering the market, prices could remain at similar levels for longer, De Solminihac said on the call.