SQM(SQM) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company experienced a favorable pricing environment for lithium, with realized average prices increasing compared to the previous period [4] - The total capital expenditure (CAPEX) for 2025-2027 is estimated at $2.7 billion, reflecting a focus on increasing production capacity and maintaining low costs [7][45] Business Line Data and Key Metrics Changes - Lithium sales volumes reached the highest in SQM history, supported by low costs and strong efficiencies at Atacama operations [4] - Iodine prices averaged close to $73 per kilogram, with revenues increasing by 5% year-on-year [6] - The specialty plant nutrition business showed sustainable growth in both volumes and revenues [5] Market Data and Key Metrics Changes - Global lithium demand is expected to exceed 1.5 million metric tons in 2025, representing over 25% growth, with strong demand from electric vehicles and energy storage systems [11][52] - China is projected to maintain a significant lead in EV markets, with a year-on-year growth of 30% [11] Company Strategy and Development Direction - The company is focused on high-quality production, being a reliable supplier, and advancing cost reduction initiatives [4] - The construction of a seawater pipeline is over 80% complete, which will enhance iodine production capacity [5] - The company is expanding its iodine production capacity through a new operation in MarÃa Elena, adding 1,500 tons of iodine capacity [5] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the lithium market, despite its volatility, and expects the positive pricing trend to continue [4] - The company anticipates robust commercial activity in the fourth quarter [5] - Management remains conservative regarding demand growth expectations for 2026, projecting over 1.7 million metric tons of lithium demand [32] Other Important Information - The joint venture with Codelco received approval from China's Antitrust Authority, and the company looks forward to advancing this partnership [8] - The company expects to produce approximately 230,000 tons of lithium from the Salar de Atacama this year [14] Q&A Session Summary Question: Insights on lithium demand, particularly in China - Management noted improved demand expectations driven by stronger-than-expected EV sales, particularly in Europe, and significant growth in battery storage shipments [11] Question: Production expectations for lithium in Chile and Australia - The company expects to produce around 230,000 tons of lithium from Atacama and increase spodumene concentrate production to 23,000-24,000 tons [14][16] Question: Impact of Kwinana Hydroxide Conversion Plant on pricing - Management indicated that as Kwinana ramps up, the realized price on an LCE basis is expected to rise closer to the Chilean price [18] Question: Update on production capacity in China - The company expects to produce around 100,000 metric tons of lithium sulfate in China, equivalent to 50,000 tons of lithium carbonate hydroxide [26] Question: CapEx reduction implications - The company clarified that the reduced CapEx will not impact capacity or projects, with a focus on maintaining strong financial health [30][43] Question: Expectations for iodine market conditions - Management indicated that supply and demand for iodine are tight, with prices expected to remain above $70 per kilogram due to limited supply growth [58]