Bloomberg
Published Aug 20, 2020 01:51AM ET
Updated Aug 20, 2020 02:54AM ET
Top Lithium Miner Boosts Output on Optimism About Long-Term Demand
(Bloomberg) -- One of the world’s largest lithium suppliers is producing at record levels because of optimism about long-term demand for the material used in electric vehicle batteries.
“Given the demand growth expectations in coming years, we feel comfortable with the higher level of inventories that are being built,” Soc. Quimica y Minera de Chile SA said after reporting second-quarter income beat the highest analyst estimates.
SQM said output levels have reached an all-time high and it’s currently producing at a rate of about 70,000 tons this year. While the company expected demand in 2020 to be similar to 2019, it remained optimistic about long-term demand growth because of increasing expectations for car sales, EV penetration rates and continued government incentives.
Between mid-2015 and mid-2018, prices for lithium almost tripled as the world’s EV fleet hit the 5 million mark and the auto industry began to fret over the supply of raw materials. Prices have since plunged by more than 50% and SQM expects them to be lower in the second half, though sees higher sales volumes.
The higher inventory levels posed the key concern for SQM’s stock, according to a Citigroup Inc (NYSE:C). note, citing elevated inventory throughout the supply chain and depressed prices. Albemarle (NYSE:ALB) Corp. and Livent (NYSE:LTHM) Corp. “seem to be taking a more conservative approach, only producing to meet customer demand,” it said.
©2020 Bloomberg L.P.
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.