Chile's Lithium Producer SQM Sees 73% Plunge in Q3 Net Profit

SQM, the Chilean company and the world's second-largest lithium producer, reported a 73% decline in net profit for the third quarter. According to the company's statement, higher sales volumes were unable to compensate for the sharp drop in average selling prices.

In this quarter, the company achieved a net profit of $131 million, while revenues decreased by 41% year-over-year to $1.07 billion. The miner reported an 18% increase in lithium sales volumes compared to the same period last year, but average prices fell by 67%. According to the statement, lithium accounted for 42% of the gross profit contribution this year.

SQM, which also produces fertilizers and industrial chemicals, benefits from low-cost production by extracting lithium from the Atacama salt flats in northern Chile, which has some of the highest lithium concentrations in the world.

The company anticipates lithium sales volumes of between 190,000 and 195,000 tons in 2024. Additionally, it expects price pressure to have a negative impact on average prices in the fourth quarter.