Sociedad Quimica Y Minera De Chile SA (SQM.US), one of the world's leading lithium producers, reported declining core earnings for the second quarter as prices for the battery-essential material dropped to multi-year lows. Adjusted earnings excluding specific items fell 28% year-over-year to $307.9 million.
The company stated that the lithium industry has been severely impacted by global supply glut, leading to significant price declines. However, China's recent production reduction measures have recently driven prices higher. SQM currently expects its Chile operations to achieve approximately 10% sales volume growth in 2025 compared to last year. The company has also raised its sales expectations for Australia.
Despite improved outlook, the company's second-quarter sales volume declined compared to the first quarter due to depressed market prices. CEO Ricardo Ramos noted in a statement: "Some of our contracted volumes have reached the minimum thresholds set within those agreements, which has affected the production levels agreed upon by both parties."
The company forecasts a "significant increase" in its Australia production during the second half of this year and has raised its international lithium business sales forecast for 2025 to approximately 20,000 tons of lithium carbonate equivalent.
In recent weeks, lithium prices have surged substantially—though still remaining about 80% below peak levels—as market participants respond to the closure of CATL's Jiangxi Yichun Ganzixiawo lithium mine. In recent years, global lithium oversupply has kept prices depressed due to new mine startups and slowing demand growth.
The company indicated in charts accompanying its earnings report: "Recent market dynamics lead us to believe that third-quarter prices may be higher than second-quarter levels."
Sociedad Quimica Y Minera De Chile SA announced that its Kwinana refinery joint venture achieved first commercial production in July. The facility is expected to reach full capacity of 50,000 tons of lithium hydroxide by the end of 2026, with half of the production belonging to the company.