Shares in lithium producers fell on Thursday after Chile’s SQM forecast continued oversupply in the market for the battery raw material, which it said would weigh on prices for the remainder of the year.
Lithium supply is set to continue to “outpace demand during 2019,” SQM said, which will “continue to have an impact on prices.”
The comments hit shares in the sector, with US-listed shares of SQM down by 5 per cent to trade at $24.23, while US producer Albemarle fell by 4.4 per cent to $62.99.
SQM, the world’s second-largest producer of lithium, said its earnings for the second quarter fell by 47.5 per cent to $70.2m due to lower lithium prices.
The market for lithium is suffering from oversupply from new mines in Australia, as well as lower electric car demand following a cut to subsidies in China this year.
SQM said its lithium prices were lower in the second quarter because it sold more material to China, where the price “was lower due to different quality and grades of products offered to this market.”
Ricardo Ramos, chief executive, said growth in supply would push lithium sales prices for the company further down to $10,000 a tonne during the third quarter, from an average first quarter price of $14,600 a tonne.