SQM will stockpile one sixth of 2019 lithium output

By William Clarke
Published: Wednesday, 03 April 2019

SQM will restrict part of its sales of lithium this year to build up stocks of the metal for strategic purposes, its chief executive said.

During a conference call with investors on Thursday February 28, chief executive Ricardo Ramossaid the Chile-based mining company would hold back more than 10,000 tonnes of its lithium output in 2019.

SQM forecasts full-year production of more than 60,000 tonnes in 2019. But Ramos said the company would sell less than 50,000 tonnes of that production over the same period, up from 45,100 tonnes in 2018.

"We want to have more strategic inventory as it is way to have more flexibility," he said.

A robust increase in new supply could erode lithium prices in 2019, Ramos also warned.

"As was expected, new supplies coming into the market make it more difficult for us to capture the price premium that we had in 2018," he said.

Fastmarkets assessed the battery-grade lithium hydroxide monohydrate (min 56.5% LiOH.H2O) ex-works China price at 95,000-103,000 yuan ($14,211-15,407) per tonne on February 28, down from 96,000-105,000 yuan per tonne in the previous week.

Lithium prices for this grade have fallen by nearly 5% since the start of February.