Chile’s SQM, the world’s second-largest lithium producer, reported a 20% drop in Q1 net profit ($137.5M vs. $171.2M expected) as collapsing lithium prices—down 90% from 2022 peaks—continued to batter the sector. Yet CEO Ricardo Ramos forecast a 2026 price rebound, betting on cost cuts and a pending partnership with state miner Codelco in the lithium-rich Atacama salt flat.
Key Numbers
📉 Profit Drop:
- $137.5M net income (vs. $171.2M estimate).
- Revenue $1.04B (in line with forecasts).
🔋 Lithium Price Pain: - Prices at $13,000/ton (down from $80,000+ in 2022).
- Oversupply + weak EV demand prolong the slump.
Strategic Moves
🤝 Codelco Partnership:
- Awaits China’s antitrust approval (expected H2 2025).
- Political “noise” from Chile’s election cycle won’t derail deal, says CEO.
✂️ Cost-Cutting Focus: - SQM’s low operational costs ($4,500/ton) provide a buffer.
- Further reductions planned through 2026.
Market Outlook
🚗 EV Demand Lag:
- Global EV sales growth slowed to 12% in Q1 (vs. 30%+ in 2023).
- Lithium inventories remain bloated.
🔄 CEO’s Bet: - Ramos predicts “reasonable” prices by 2026, but warns of more pain in 2025.
What’s Next?
- Codelco Deal Closure: Could solidify SQM’s dominance in Atacama.
- Political Risks: Chile’s November election may spark resource nationalism debates.
- Price Bottom? Traders watch for supply cuts to stabilize the market.
Chile’s SQM Profit Slumps as Lithium Glut Persists, But CEO Sees 2026 Recovery