SQM(SQM) - 2021 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company's earnings in Q3 2021 were significantly higher than the same period last year, driven by increased sales volumes and prices across nearly all business lines [9] - The lithium market demand is expected to grow close to 50% in 2021, with sales volumes projected to reach nearly 100,000 metric tons [10] - Average sales prices for lithium are anticipated to exceed $12,000 per metric ton in Q4 2021 [10] Business Line Data and Key Metrics Changes - Total iodine sales in 2021 are expected to be around 12,500 metric tons, with average sales prices increasing from previous quarters [11] - The potassium and potassium nitrate average prices are projected to reach almost $700 and over $1,000 per metric ton, respectively, during Q4 2021 [12] Market Data and Key Metrics Changes - The iodine market has recovered faster than anticipated, reaching pre-pandemic demand levels [11] - The fertilizer market has seen significant price increases due to supply chain disruptions and export restrictions [12] Company Strategy and Development Direction - The company is focused on sustainable growth and plans to expand lithium capacity to 180,000 metric tons by mid-2022 [10] - There is a positive outlook for the fertilizer market, with strong demand and high prices expected to continue [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver future growth while operating sustainably [12] - The company anticipates a record performance in Q4 2021, with significantly higher EBITDA [12] Other Important Information - The company has faced some cost increases due to inflation and supply chain issues, which have affected production costs [35][36] - A fire incident at one of the facilities had a limited impact on production and incurred additional costs of approximately $200,000 [42] Q&A Session Summary Question: Production and Sales Expectations for Lithium - Management expects lithium production to reach around 140,000 metric tons in 2022, with sales volumes growing in line with demand [16][17] Question: Pricing Guidance for 2022 - Approximately 80% of anticipated sales volumes for 2022 are still open for negotiation, with 20% already contracted [20][21] Question: Iodine Pricing and Supply Concerns - Management noted that iodine prices are influenced by supply and demand dynamics, with current prices around $35 per kilogram [32] Question: Cost Impacts from Inflation - Production costs have increased due to higher raw material and energy costs, which are expected to continue affecting the company [35][36] Question: Future Demand for Lithium - The company anticipates continued strong demand for lithium, particularly driven by electric vehicle sales, with expectations for 2022 to be between 20% and 30% growth [37][58] Question: CapEx Guidance for 2022 - The company expects CapEx for 2022 to be close to $500 million [60]