Just days ago, Goldman Sachs took down lithium stocks.
The firm said the gap between supply and demand is quickly narrowing and could be back in balance by 2023. They also believe lithium production could be well above demand by at least 400,000 tons. Unfortunately for Goldman Sachs, they’re wrong again.
In fact, according to Sociedad Quimica y Minera, “The market needs about 200 to 300,000 tonnes of lithium every year (to meet demand) and that means that you need roughly 8 to 10 new projects coming on stream every year.”
That’s not happening so fast.
Even better, after being taken down by Goldman Sachs, lithium stocks are being taken back up for SQM earnings. The company posted revenue of $2.96 billion in the third quarter of 2022, which was up 347% year over year. Net income of $1.10 billion was up 937% year over year. EPS of $3.85 was up 941% year over year.
Moving forward, numbers are only likely to get better, as demand gains momentum. According to SQM CEO Ricardo Ramos, “We continue to see strong signals regarding the future demand growth of lithium. This year we believe demand growth will be over 40% when compared to last year and for this reason, we continue to invest in new projects.”
“In September, we announced the purchase and development of a new plant in China, that will let us produce up to 30,000 metric tons of lithium hydroxide in China, from lithium sulfate coming from Chile,” he added.
On the news, shares of SQM are up about 10% on the day on a volume spike to 2.31 million shares, as compared to daily average volume of 1.67 million.