Group 1 - The investment thesis indicates a potential turnaround in the lithium market prices, suggesting an opportunity for increased exposure in lithium investments [1] - The article highlights that there are early signs of a price recovery in the lithium market, particularly noted during the summer months [1] - The analyst expresses a positive outlook based on forecasts for a sustained increase in lithium prices, which may benefit companies involved in lithium production [1]

Financial Data and Key Metrics Changes - In Q2 2025, the company experienced a revenue decline of over 3% year-on-year due to lower lithium prices compared to earlier in the year [6][9] - The company expects yearly sales volume from Chilean operations to increase by at least 10% versus 2024 [8][9] Business Line Data and Key Metrics Changes - Iodine was the most profitable segment in Q2 with an adjusted gross margin of 57%, contributing over 50% to total company gross profit [9] - Sales volume for the Chile lithium division reached 51,700 metric tons in Q2, similar to Q2 last year, with expectations for Q3 sales to be at least 10% higher than Q2 [32][70] Market Data and Key Metrics Changes - Strong demand growth for lithium is noted, particularly from the EV sector in China and Europe [6][7] - Prices for lithium carbonate in China have been recovering, with expectations for Q3 prices to be higher than Q2 [32][33] Company Strategy and Development Direction - The company is confident in capturing strong fundamentals in the lithium market while maintaining solid results across all business segments [10] - The strategy remains focused on producing at full capacity and expanding in line with expected market growth [33] Management Comments on Operating Environment and Future Outlook - Management noted a change in market dynamics with recent price improvements and strong demand growth [6][8] - The company is optimistic about the iodine market, expecting solid fundamentals to continue despite supply constraints [20][51] Other Important Information - The Tijuana refinery is now complete and has delivered its first product on spec, with a ramp-up underway to produce 50,000 metric tons of lithium hydroxide annually [8] - The company is working on the Salar Futuro project, with environmental studies expected to be submitted next year [43][44] Q&A Session Summary Question: Midterm or long-term goals for SPN - The company aims to grow its SPN business by adding services and products while maintaining solid margins [12][14] Question: Expansion of Mount Holland - The expansion decision will not be made in 2025, with ongoing engineering studies and approvals [15][16] Question: Iodine price sustainability - Demand for iodine is expected to grow, but supply constraints may limit growth [18][20] Question: Mt. Holland mine economics - Current production costs are not reflective of long-term projections, but the company remains profitable [39][40] Question: Update on Codelco deal - The process with Codelco is moving positively, with expectations for completion in the coming months [54][66] Question: Current lithium inventory levels - The company expects to have close to 230,000 metric tons of lithium inventory, aligning with projected sales [69][70]

Financial Data and Key Metrics Changes - Revenues decreased by more than 3% year on year due to lower lithium prices compared to earlier in the year [7] - Lithium sales volumes from the Salar De Atacama were almost flat compared to last year, impacted by lower prices triggering contract floors [8] - The company expects yearly sales volume from Chilean operations to increase by at least 10% versus 2024 [9] Business Line Data and Key Metrics Changes - Iodine was the most profitable segment in Q2 with an adjusted gross margin of 57%, contributing over 50% to total company gross profit [9] - The specialty plant nutrition business remained stable, reflecting resilient demand across key markets [10] - Potassium volumes were lower as guided, but prices remained firm [11] Market Data and Key Metrics Changes - Strong demand growth for lithium is observed from EV and BEST sectors, particularly in China and Europe [7] - Lithium carbonate prices in China have been recovering, with expectations for higher sales prices in Q3 compared to Q2 [33] - The company anticipates that sales in the second semester of the year will be higher than the first semester and higher than the second semester of last year [33] Company Strategy and Development Direction - The company is confident in capturing strong fundamentals of the lithium market while delivering solid results across all businesses [11] - The expansion decision for Mt. Holland will not be made in 2025, with periodic reviews planned for the following year [16] - The company aims to maintain production at full capacity and expand in line with expected market growth [34] Management's Comments on Operating Environment and Future Outlook - Management noted a change in market dynamics with recent price improvements and strong demand growth [7] - The iodine market is expected to see solid fundamentals, with demand growth anticipated next year if capacity is available [20] - The company remains optimistic about the business outlook, citing strong demand and a positive price environment despite volatility [70] Other Important Information - The Tijuana refinery is now complete and has delivered its first product on spec, on budget, and on time [8] - The company is working on the Salar Futuro project, with environmental studies expected to be submitted next year [43][44] - The company is investing significantly to increase iodine supply to meet customer needs [51] Q&A Session Summary Question: What is the midterm or long-term goal for SPN? - The strategy involves growing volume and adding services and products to maintain a solid brand and pricing [14] Question: What is the current thinking on the Mt. Holland expansion? - The expansion decision will not be made in 2025, with ongoing engineering studies and approvals [16] Question: What will break iodine prices? - Demand is expected to grow, but supply constraints due to environmental restrictions may limit growth [52] Question: What is the current status of the deal with Codelco? - The process is moving positively, with expectations for completion in the next few weeks [66] Question: What is the current lithium inventory level? - The company expects to have close to 230,000 metric tons of lithium inventory, aligning with projected sales [68]

Financial Performance - SQM's Q2 2025 revenue reached US$1,043 million[7], gross profit was US$254 million[7], and net income totaled US$308 million[7] - Earnings per share stood at US$0.31[7] - Lithium LTM revenue reached $1,977 million[12], with a gross profit of $410 million[12] - Iodine LTM revenue reached US$985 million[23], with a gross profit of US$523 million[23] - Specialty Plant Nutrition LTM revenue reached US$946 million[33], with a gross profit of US$146 million[33] - Potassium LTM revenue reached US$217 million[40], with a gross profit of US$28 million[40] - Industrial Chemicals LTM revenue reached US$74 million[46], with a gross profit of US$28 million[46] Market Dynamics and Outlook - The global lithium market is expected to grow by approximately 17% in 2025[18] - SQM anticipates a sales volume growth of around 10% in the Lithium Chile division compared to 2024[18] - The company expects to sell approximately 20,000 tons of LCE for the International Lithium Division in 2025[18] - Global iodine demand growth is updated to less than 1% in 2025 compared to 2024[29] - SQM expects a market growth rate of around 4-5% in 2025 for Specialty Plant Nutrition[36] - Potassium sales volume for 2025 is expected to decline by 50% compared to 2024[42] Strategic Investments - Total Capex for 2025 is estimated at US$750 million, including maintenance[21] - Iodine and Nitrates total capex for 2025 is approximately US$350 million, including maintenance[31] Market Share - SQM holds approximately 17% of the global lithium chemical market[12] - SQM holds approximately 37% of the global iodine market[28] - SQM holds approximately 41% of the global KNO3 market[38] - SQM holds less than 1% of the global potash market[43] - SQM holds approximately 32% of the global industrial potassium nitrate market[49]

Market Movements - US stock index futures are all down ahead of the market opening, with Dow futures down 0.11%, S&P 500 futures down 0.08%, and Nasdaq futures down 0.16% [1] - European indices show mixed results, with Germany's DAX down 0.41%, UK's FTSE 100 up 0.26%, France's CAC 40 up 0.12%, and the Euro Stoxx 50 unchanged [1] Oil Prices - WTI crude oil is up 1.25% at $62.54 per barrel, while Brent crude oil is up 1.11% at $66.52 per barrel [2] Market News - Morgan Stanley reports that major tech stocks like Google, Amazon, Apple, Meta, Microsoft, and Nvidia are experiencing the largest underweight by actively managed funds in 16 years, suggesting potential for future gains as institutional funds may increase their holdings [3] - Citadel Securities' Scott Rubner predicts that retail investors' buying activity may slow down in September after a strong market performance in June and July, which typically marks a low point for retail participation [4] - Deutsche Bank questions US Treasury Secretary's call for a significant rate cut, asserting that current interest rates are reasonable based on traditional monetary policy models [4] Company News - Google faces potential forced divestiture of its Chrome browser as part of an antitrust ruling, marking a significant regulatory challenge [6] - Meta is restructuring its AI team into four independent groups to better leverage its recent talent acquisitions, aiming to accelerate its pursuit of "superintelligence" [7] - Target's Q2 net sales fell 0.9% to $25.21 billion, but exceeded market expectations, with adjusted EPS of $2.05, slightly above forecasts [8] - Lowe's Q2 revenue reached $23.96 billion, slightly above expectations, with adjusted EPS of $4.33, also beating forecasts [9] - Estée Lauder's Q4 sales fell 12% to $3.41 billion, with a net loss of $546 million, impacted by restructuring costs [10] - Baidu reported Q2 net profit of 7.322 billion yuan, with total revenue of 32.713 billion yuan, a 4% year-over-year decline [11] - iQIYI's Q2 total revenue was 6.63 billion yuan, with membership service revenue of 4.09 billion yuan [11] - Kingsoft Cloud's Q2 revenue grew 24.2% year-over-year to 2.35 billion yuan, with AI revenue increasing over 120% [11] - Futu Holdings' Q2 revenue rose 69.7% to 5.311 billion HKD, with net profit increasing by 105.2% [12] - SQM's Q2 core earnings dropped 28% due to falling lithium prices, but the company expects prices to recover in Q3 [12]

Core Viewpoint - SQM's core earnings declined in Q2 due to a significant drop in lithium prices, reaching a multi-year low, with adjusted earnings down 28% year-over-year to $307.9 million [1] Group 1: Financial Performance - Adjusted earnings for SQM fell to $307.9 million, a 28% decrease compared to the same period last year [1] - The company's sales volume in Q2 decreased compared to Q1 due to low market prices [1] Group 2: Market Dynamics - The lithium industry is facing severe impacts from global oversupply, leading to significant price declines, although recent production cuts in China have contributed to a price rebound [1] - Recent market dynamics suggest that prices in Q3 may be higher than in Q2 [2] Group 3: Future Outlook - SQM expects a 10% increase in sales volume in Chile by 2025 compared to last year [1] - The company has raised its sales forecast for Australia and anticipates a "significant increase" in production in the second half of the year [1] - SQM's international lithium business sales forecast for 2025 has been adjusted to approximately 20,000 tons of lithium carbonate equivalent [1] - The joint venture with Kwinana refinery achieved its first commercial production in July, with full capacity expected to reach 50,000 tons of lithium hydroxide by the end of 2026, half of which will belong to SQM [2]

Financial Performance - The company reported net income of US$226.0 million or US$0.79 per share for the six months ended June 30, 2025, a significant recovery from a net loss of US$(655.9) million or US$(2.30) per share for the same period last year [2][6] - Gross profit for the six months ended June 30, 2025, was US$558.3 million, representing 26.8% of revenues, down from US$752.5 million or 31.6% of revenues for the same period in 2024 [3][6] - Total revenues for the six months ended June 30, 2025, were US$2,079.3 million, a decrease of 12.6% compared to US$2,378.1 million reported for the same period in 2024 [3][6] Quarterly Results - For the second quarter of 2025, net income was US$88.4 million or US$0.31 per share, a decrease of 58.6% from US$213.6 million or US$0.75 per share in the second quarter of 2024 [4][6] - Gross profit for the second quarter of 2025 was US$253.6 million, down 34.0% from US$383.9 million in the second quarter of 2024 [4][6] - Revenues for the second quarter of 2025 totaled US$1,042.7 million, a decrease of 19.4% compared to US$1,293.6 million for the same quarter in 2024 [4][6] Market Conditions and Operations - The CEO noted that the company faced lower lithium market prices in the second quarter, impacting contract volumes and total sales [5] - Despite the challenges, the company expects sales volumes from its Salar de Atacama operations to grow by approximately 10% compared to the previous year [5] - The Kwinana refinery in Australia, a joint venture with Wesfarmers, has completed construction and achieved first product production, with a ramp-up period expected to take 18 months [5]

Group 1 - The company Tianqi Lithium stated on August 18 that there is currently no actual business cooperation with SQM [2] - The company confirmed that there is no joint venture with SQM [2]

Core Insights - Lithium is becoming a highly sought-after commodity due to the increasing demand from data center buildouts in the U.S. and the reliance on lithium for supercomputers used in AI model training [1] - Over 75% of global lithium production and supply originates from China, with a leading Chinese company reducing production until government approval is received, causing lithium prices to surge by 24.2% in July 2025 [2][3] Company Summaries Albemarle Corporation - Albemarle is expected to see significant earnings growth, with analysts projecting earnings of $2.74 per share for the upcoming quarter, a substantial increase from the previous result of $0.11 per share [5] - The company has outperformed Wall Street expectations, which anticipated a net loss of $0.83 per share, indicating strong financial momentum and potential for institutional buying [6][7] - Current stock price is $80.16, with a price target of $88.06 and a dividend yield of 2.02% [4] Sociedad Quimica y Minera (SQM) - SQM stock has experienced a one-week rally of approximately 27%, trading at 97% of its 52-week high, indicating strong bullish momentum [8][9] - The company's operations in the U.S. and Chile, where major lithium mines are located, position it favorably to meet the growing demand for lithium [9] - A recent 12.2% decline in short interest suggests that some short sellers are losing confidence in the stock's near-term decline, indicating potential for further upside [11] Lithium Americas - Lithium Americas owns 100% of the lithium mining rights at Thacker Pass in Nevada and other locations in Canada, allowing for efficient domestic sourcing of lithium [13] - The stock has joined the lithium rally with an 18.7% performance increase, suggesting positive market sentiment [14] - There is potential for a "short squeeze" due to $68.7 million in short positions, which could lead to additional buying pressure if short sellers are forced to cover their positions [15]

Market Performance - US stock market showed a calm performance ahead of the July Consumer Price Index (CPI) report, with all three major indices closing slightly lower. The Dow Jones fell by 0.45% to 43975.09 points, the Nasdaq dropped by 0.3% to 21385.4 points, and the S&P 500 decreased by 0.25% to 6373.45 points [10][9][1]. Economic Indicators - The upcoming CPI report is expected to serve as a benchmark for assessing the impact of US trade policies on inflation and will provide guidance for the Federal Reserve's interest rate decisions [10][1]. - A recent Bank of America survey indicated that approximately 91% of respondents believe US stocks are overvalued, marking the highest percentage since the survey began in 2001 [10][1]. Sector Performance - Major technology stocks experienced mixed results, with Apple down 0.83%, Microsoft down 0.05%, Amazon down 0.62%, Nvidia down 0.35%, Google down 0.21%, while Tesla rose by 2.85%, Meta down 0.45%, AMD down 0.28%, and Intel up 3.51% [10][1]. International Market Movements - Japanese and South Korean stock markets showed positive movements, with the Nikkei 225 index rising over 2% to a new historical high of 42681.89 points, and the KOSPI200 index increasing by over 1% to 437.83 points [2][1]. Labor Statistics - President Trump announced the nomination of economist E.J. Antoni as the next director of the Bureau of Labor Statistics, indicating potential reforms in the agency's data reporting methods [14][13]. - The administration is also considering candidates for the upcoming vacancy of the Federal Reserve Chair, including current vice chairs and the Dallas Fed president [16][15].