Home > Auto > News > Top lithium miner boosts output on optimism about long-term demand for EVs

One of the world’s largest lithium suppliers is producing at record levels because of optimism about long-term demand for the material used in electric vehicle batteries.

“Given the demand growth expectations in coming years, we feel comfortable with the higher level of inventories that are being built," Soc. Quimica y Minera de Chile SA said after reporting second-quarter income beat the highest analyst estimates.

SQM said output levels have reached an all-time high and it’s currently producing at a rate of about 70,000 tons this year. While the company expected demand in 2020 to be similar to 2019, it remained optimistic about long-term demand growth because of increasing expectations for car sales, EV penetration rates and continued government incentives.

Between mid-2015 and mid-2018, prices for lithium almost tripled as the world’s EV fleet hit the 5 million mark and the auto industry began to fret over the supply of raw materials. Prices have since plunged by more than 50% and SQM expects them to be lower in the second half, though sees higher sales volumes.

The higher inventory levels posed the key concern for SQM’s stock, according to a Citigroup Inc. note, citing elevated inventory throughout the supply chain and depressed prices. Albemarle Corp. and Livent Corp. “seem to be taking a more conservative approach, only producing to meet customer demand," it said.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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