Q2 2024 Sociedad Quimica y Minera de Chile SA Earnings Call Transcript
Key Points
- Sociedad Quimica Y Minera De Chile SA (SQM) achieved a significant milestone by entering into a partnership agreement with Codelco to jointly operate the Salar de Atacama until 2060.
- The company reported record sales volumes in lithium and iodine businesses, exceeding 52,000 metric tons and 4,000 metric tons, respectively.
- Strong demand growth in the iodine market is expected to continue, potentially making 2024 a record year with volumes exceeding 14,500 metric tons.
- Sociedad Quimica Y Minera De Chile SA (SQM) formed SQM International Lithium to develop its lithium business outside of Chile, leveraging its expertise in exploration, project development, mining, and chemical operations.
- The company is committed to expanding its lithium portfolio overseas, with significant investments planned in Australia and other regions.
- Lithium prices have declined since the beginning of July, and the company anticipates that average selling prices in the third quarter could be lower than in the previous quarter.
- Despite strong sales volumes, the company faces challenges with the current lithium price environment, which may impact profitability and market attractiveness.
- The company is reassessing the attractiveness of certain market initiatives and capacity expansion projects due to the current price environment.
- There are concerns about the oversupply in the lithium market, and the company is maintaining production targets despite potential market discipline issues.
- The company's net income year-to-date is negative, primarily due to a one-time effect from the lithium mining tax applied in the first quarter.
Good afternoon and welcome to the SQM second-quarter 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Irina Axenova, Head of Investor Relations. Please go ahead.
Thank you. Good afternoon. Thank you for joining SQM's earnings conference call for the second quarter of 2024. This conference call will be recorded and is being webcast live. Our earnings press release and the presentation with a summary of the results have been uploaded into our website where you can also find a link to the webcast.
Ricardo Ramos, our Chief Executive Officer, will be speaking on the call today. Gerardo Illanes, our Chief Financial Officer; Carlos Diaz, CEO of SQM Salar; Mark Fones, CEO of SQM International Lithium; Felipe Smith, Commercial Vice President of SQM Salar; Pablo Hernandez, Senior Director of Business Strategy and Development, SQM Salar; Pablo Altimiras, CEO of Iodine &
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