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Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
Chile’s SQM (NYSE: SQM), the world’s second-largest lithium producer, expects prices for the battery metal to stay high into 2023 on the back of soaring demand boosted by strong sales of electric vehicles (EVs) in China.
In its results for the the three months to September 30, the miner announced record lithium sales, which more than quadrupled in the quarter from a year ago.
The company’s highest quarterly sales, combined with above-average lithium prices, helped it achieve a net profit of $1.1 billion in the period.
Revenue surged more than four times year-on-year to $2.95 billion, with lithium revenues growing more than 12 times.
Prices for the battery metal jumped to record levels during Q3 at more than $56,000 per tonne, it said.
Despite market fears over a possible cooling-off of China’s two-year lithium buying spree, SQM remains bullish on the long-term outlook.
The Santiago-based miner forecast global lithium demand to grow this year by at least 40% thanks to rising EVs sales in China, which it estimates will exceed 6.5 million units — double last year’s amount.
“On top of the strong demand growth, similar to what we have seen in the past, new lithium supply outside of SQM has been delayed and slow to come online,” the company said.
That will keep the market tight and means “this high-priced environment could continue for the remainder of 2022 and into 2023.”
Albemarle (NYSE: ALB), the world’s top lithium producer, also reported a surge in sales earlier this month.
Both companies are the only two producing the battery metal in Chile’s Atacama region, which supplies nearly one-quarter of the globe’s lithium.
The copper-rich country currently generates about 29% of the world’s supply, but it plans to double production by 2025 to about 250,000 tonnes of lithium carbonate equivalent.
