SQM Hit by Low Lithium Prices, Investments to Slow in 2025

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Lithium miner Sociedad Química y Minera (SQM) (Santiago, Chile) reported a net loss of US$404.4 million for full-year 2024, compared to net income of US$2 billion in 2023. In the fourth quarter, the company reported net income of US$120.1 million, about 41% below the same period in 2023. Despite the weaker financial performance, SQM continued to grow its production in 2024.

"We closed the year with double-digit volume growth in almost all of our business lines, when comparing full-year 2024 versus 2023," said Ricardo Ramos, the chief executive officer of SQM, in a press release. "In the lithium and iodine businesses, we posted unprecedented sales volumes, the highest in the company's history."

But the recent collapse in lithium prices is weighing on SQM's financial performance. The value of the mineral has dropped from a high of US$76,000 per ton in January 2023 to US$10,000 a ton so far this month. The current price is the lowest going back to 2021.

The price drop is partly the result of lower-than-expected demand for electric vehicles (EVs), triggering a slowdown in lithium development worldwide.

This has led some mining companies to suspend operations, while others have reduced their production goals or turned their operations toward maintenance.

Yet, not everything is negative. SQM estimated that the lithium market demand increased by 25% last year and is expected to grow an additional 17% in 2025, thanks to the growth of EV sales and battery energy-storage systems.

SQM forecasts prices to remain stable this year and hopes a positive trend will begin next year.

However, the company will reduce its capital expenditures (capex) to US$1.1 billion for 2025, including maintenance, from the US$1.6 billion spent last year.

For 2025, US$550 will be allocated for the company's Chile lithium division: US$350 for the Iodine-Plant Nutrition division, and US$200 lithium for the international lithium division.

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