Lithium prices continue to fall, Chilean mining and chemical company SQM reported an 82% profit drop in Q4.

Chilean mining and chemical company SQM, the world's second-largest lithium producer, announced its fourth quarter performance on Wednesday. The data showed that the company had Q4 revenue of $1.31 billion, a 58% decrease compared to the same period last year, below market expectations of $1.35 billion; net profit was $205.9 million, an 82% decrease compared to market expectations of $317 million, due to the continued decline in the price of lithium, a key battery metal. SQM achieved a record high lithium sales volume in the fourth quarter, reaching around 51,000 tons, an increase of nearly 20% compared to the same period last year, despite an approximately 73% decrease in the average price of lithium. Ricardo Ramos, CEO of SQM, stated in a press release: "It is expected that the oversupply of lithium and battery materials last year will continue this year, putting pressure on lithium market prices." He expects SQM's average prices to remain "relatively stable" by 2024. In 2023, the oversupply of lithium globally caused prices to decline, leading to layoffs and expansion halts by companies such as the world's largest supplier, Albemarle. However, SQM stated that with the expansion of its Chilean operations, lithium sales are expected to grow by 5% to 10% this year, with first-quarter lithium carbonate production reaching around 210,000 tons. The company also indicated that capital expenditures for this year are expected to reach around $1.3 billion. After Wednesday's after-hours trading, SQM's stock fell more than 1%. The stock has fallen by around 30% in the past 12 months.