Contradictions Unveiled: SQM's 2025 Q2 Earnings Call on Mt. Holland Expansion, Lithium Demand, and Market Dynamics

Mt. Holland expansion decision and timing, lithium demand growth expectations, Mt. Holland mine expansion, iodine supply and demand dynamics, and divergent market assessments and strategic alignment are the key contradictions discussed in Sociedad Química y Minera de Chile S.A.'s latest 2025Q2 earnings call.



Lithium Market Dynamics:
- SQM's lithium sales volumes remained flat compared to last year, with lower prices impacting contract volumes.
- The company is optimistic about a 10% increase in yearly sales volumes from Chilean operations, driven by strong demand from EV and BEV markets, particularly in China and Europe.

Iodine Market Strength:
- SQM expects iodine demand to grow less than 1% in 2025 due to supply constraints, with capacity constraints impacting demand.
- Despite recent supply delays, additional capacity is expected to come online in the following year, maintaining strong market fundamentals.

Diversification and Profitability:
- Iron was SQM's most profitable segment in Q2, contributing more than 50% to total company gross profit with an adjusted gross margin of 57%.
- The segment's profitability is attributed to strong demand and tight supply, expected to continue into the coming years.

Mt. Holland and Kwinana Expansion:
- The company's lithium expansion decision for Mount Holland will be reviewed periodically, considering market context and financial evaluation.
- The Kwinana refinery has successfully delivered its first product on spec, on budget, and on time, starting the ramp-up phase.