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Sociedad Química y Minera de Chile S.A. (NYSE:SQM) Q2 2019 Results Conference Call August 22, 2019 12:30 PM ET
SociedadQuímicayMinera de Chile S.A.（纽约证券交易所代码：[SQM]）2019年第二季度业绩电话会议2019年8月22日美国东部时间下午12:30
Ricardo Ramos - CEO
Gerardo Illanes - CFO
- 里卡多拉莫斯 - 首席执行官
- Gerardo Illanes - 首席财务官
Alex Falcao - HSBC
Chris Terry - Deutsche Bank
Andrew McCarthy - Citi
Ben Isaacson - Scotiabank
César Pérez-Novoa - BTG Pactual
Joel Jackson - BMO
Isabella Simonato - Bank of America
- 亚历克斯法尔考 - 汇丰银行
- 克里斯特里 - 德意志银行
- 安德鲁麦卡锡 - 花旗
- Ben Isaacson - Scotiabank
- CésarPérez-Novoa - BTG Pactual
- 乔尔杰克逊 - BMO
- Isabella Simonato - 美国银行
Good day, and welcome to the SQM Second Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Gerardo Illanes, CFO. Please go ahead.
美好的一天，欢迎参加SQM 2019年第二季度收益电话会议。 所有参与者都将处于只听模式。 [操作员说明]请注意，此事件正在录制中。
我现在想把会议转交给首席财务官Gerardo Illanes。 请继续。
Thank you. Good morning, everyone, and welcome to SQM's second quarter 2019 earnings conference call.
For your information, this conference call will be recorded and is being webcast live. You may access the webcast later on at our website www.sqm.com. A presentation with a summary of the results has been uploaded at our website and it is also available on our webcast. Joining me today, our speaker is Ricardo Ramos, Chief Executive Officer.
Before we begin, let me remind you that statements in this conference concerning the Company's business outlook, future economic performance, anticipated profitability, revenues, expenses, other financial items, anticipated cost synergies and product or service line growth, together with other statements that are not historical facts, are forward-looking statements as that term is defined under federal securities law.
Any forward-looking statements are estimates reflecting the best judgment of SQM based on currently available information and involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. Risks, uncertainties and factors that could affect the accuracy of such forward-looking statements are identified in the public filings made with the Securities and Exchange Commission and forward-looking statements should be considered in light of those factors.
I now leave you with our Chief Executive Officer, Ricardo Ramos, for brief comments before we move to Q&A.
Thank you, and good morning for joining us today in the second quarter 2019 earnings conference call. I will begin with some brief comments on our second quarter results before opening the line up for questions. You can follow along with the webcast presentation.
Turning to page three of the webcast presentation, we will see a brief overview of our second quarter results. Our revenue for the six months ended June 30, 2019, reached almost $500 million, and our net income reached just over $70 million, lower than the $134 million reported during the same period last year. We saw a lower adjusted EBITDA margin this quarter when compared to the previous quarter, but it’s still above 33%.
Turning to the next page, you can see that the main driver of these lower results was primarily lower contribution to gross profit from lithium because of lower average prices, although partially offset by higher sales volumes. Our results were also impacted by potassium chloride volumes, and the lack of solar salts sales during the second quarter. Iodine prices were strong during the second quarter, and we did see a positive change in the contribution to the Company’s gross profit from this business line. SQM is a dynamic and diverse company, which is subject to cycles. We have seen lithium, potassium, iodine and SPN leading the Company’s gross profit.
In the lithium business line, the realized average prices we reported in the second quarter were lower than the ones reported in the first quarter, mainly because we have been selling under short term contracts, which expose us more to the ups and downs of the market. Over the past few months, changes in timing and amount of the subsidies, given that the Chinese government to the electric vehicle industry had an impact on the delivery of the demand for electric vehicles in the most important market and consequently on the demand for lithium products. These changes may have a total impact on this year’s demand of 3,000 to 4,000 metric tons, but should not have a lasting effect on the demand for electric vehicles market as we continue to see a strong commitment from the Chinese government and other relevant players in China and abroad to the electrification of the vehicle industry. This can be seen in the sign that demand for electric vehicles in China could grow about 33% this year, when we compare to last year. Slight changes in the demand are the direct impact in our realized prices and we continue to have an impact positive or negative.
Despite the current noise we are seeing in the market, our commitment to the lithium industry is stronger than ever. We are increasing our production in the second half this year as we prepare to increase our sales volumes to 65,000 metric tons next year. We’ll keep working on our expansion plan to reach 120,000 metric tons capacity by the second half of 2021. Beyond that our plan is to continue to expand capacity every two years in incremental models of 40,000 metric tons each expansion. Therefore, our next step will be a total capacity of 160,000 metric tons by the end of the year 2023. Since we are already working on the engineering of this project, all this will lead us first to recuperate the market share we lost over the past years and maintain a strong market share in the growing market.
It is too early to forecast what may happen in 2020, but there are few things that I think are relevant to discuss at this stage. We have seen higher prices in the iodine business line and believe this positive trend could continue in coming months and quarters. The iodine market is a favorable market with a steady growth rate. And SQM has access to one of the best iodine resources in the world.
The SPN market is expected to continue with its healthy growth. The environmental restrictions that we have on the brine extraction in the Salar de Atacama is being released and the resource and our sales volumes of potassium chloride are expected to close to 600,000 metric tons this year that is approximately 20% more than previously anticipated, and we expect to be close to 1 million tons next year, 2020.
We believe in the future of the solar salt market. And we will be supplying a very large concentrated solar power plant project in the Middle East with delivery starting in 2020, which will require over 400,000 metric tons. As you can see, SQM continues to take advantage of opportunities across all business lines.
I will close my reviewing the CapEx plan that we have announced as of today. On page six of the presentation, the Board has approved a CapEx plan of $360,000 million for 2019. As you can see, this is related to our lithium expansion plans in Chile, both carbonate and hydroxide. We continue to work with Kidman and with farmers on the Mount Holland lithium project in Western Australia, and we look forward to completing the feasibility steady beginning of 2020. At that point, we will have more details surrounding the CapEx, cost and timing of the project. Furthermore, we have previously announced that we are working on the environmental permits necessary to increase iodine capacity in the near future, and we are increasing nitrates to meet the growing demand in industrial and fertilizer nitrate space.
I will now open the lines up for questions.
预计SPN市场将继续保持健康增长。我们对Salar de Atacama盐水开采的环境限制正在释放，今年氯化钾的资源和销售量预计接近600,000公吨，比先前预期的高出约20％，我们预计到2020年将接近100万吨。
[Operator Instructions] The first question will come from Alex Falcao of HSBC.
Hi. Good afternoon. Thanks for taking my question. My question is regarding prices for lithium, specifically on the regional breakdown. So, if you go into the Chilean data, basically it says that you sold a lot more to China than you have previously done in previous quarters. But, the price is extremely lower, talking about between $6,000 and $7,000. Can you comment on why are you selling lithium so cheap, and if that's the trend that you should continue to see in other quarters? Thank you.
你好。 下午好。 谢谢你提出我的问题。 我的问题是锂的价格，特别是区域细分。 所以，如果你进入智利的数据，基本上它说你在中国卖的比以前几个季度多得多。 但是，价格非常低，价格在6,000美元到7,000美元之间。 你能评论一下为什么你卖锂这么便宜，如果这是你应该继续在其他季度看到的趋势？ 谢谢。
You know that we are significant global player in the lithium industry. Therefore, we need to sell in all markets, including China, which is a key market in electric vehicle and batteries. We sell to different customers in China with different grades, different industries, different volumes. And SPN, lithium production and specifications of course are aligned with this market requirement. China is going to be a part of our business for sure, in the future. We don't expect to get out of the market, keeping in mind that we expect to be at 65,000 metric tons next year and continue to grow with the market; it means a very strong growth by moving to the 120,000 metric tons expansion, to the 160,000 that has been under engineering today, means we need to sell everywhere.
China, I will not comment about pricing now, but I do not agree with you about the pricing in China in the $6,000 per metric tons. We’re selling on marketing conditions in China today and we're selling in China according to the needs of the different industries in China.
The next question will come from Chris Terry of Deutsche Bank.
The first one just relates to the pricing strategy. Just wondering whether you could remind us how far in advance, how many months forward, you have color over what you're selling the material at, and whether you can talk a little bit about the fourth quarter. Previously, you’d spoken about the second half being 11,000 to 12,000, as you talked about 3Q specifically. I just wondered whether there is any comments on the rest of the year beyond 3Q?
第一个与定价策略有关。 只是想知道你是否能提醒我们提前多久，前几个月，你有什么颜色在你卖的材料，以及你是否可以谈谈第四季度。 之前，你曾经说过下半场是11,000到12,000，正如你特别谈到的第3季。 我只是想知道在第三季度以后的剩余时间里是否有任何评论？
I explained before for the third quarter, we are almost closing all the pricing today in the third quarter, that's why we have an outlook about third quarter. But -- that's why we have a very good idea about third quarter. But, we're now, as we speak, currently discussing prices for the fourth quarter. And as you know, price is extremely sensitive to slight changes in the short term demand growth. We've seen that in the next two months, we will have a better understanding about a very good outlook over the fourth quarter. Now, we think that it's reasonable to have the outlook of the third quarter out there that is $10,000 per metric tons I've already shared with you, close to.
我之前解释过第三季度，我们几乎已经在第三季度完成所有定价，这就是我们对第三季度的展望。 但是 - 这就是为什么我们对第三季度有一个非常好的想法。 但是，正如我们所说，我们现在正在讨论第四季度的价格。 如您所知，价格对短期需求增长的微小变化极为敏感。 我们已经看到，在接下来的两个月里，我们将对第四季度的良好前景有更好的了解。 现在，我们认为第三季度的展望是合理的，即我已与您分享的每公吨10,000美元，接近于。
And just in terms of the China sales, I know you don't want to comment against those -- that previous -- the numbers before. But, can you talk about the mechanism to which you saw into China or is it linked at all to the China spot price, is at a separate price that’s more similar to outside China pricing? Just wondering whether you could talk through how the discussions work within that region? Thank you.
就中国的销售而言，我知道你不想对那些以前的数字发表评论。 但是，你能谈谈你看到中国的机制还是与中国现货价格挂钩的机制，是否与中国境外定价更相似？ 只是想知道你是否可以谈谈讨论在该地区的运作方式？ 谢谢。
Hi, Chris. Let me comment that China is a market like every single market where you have different customers, and as I explained you before, different customers, we have different industries, different grades. And we sell to every single important customer in China. And it’s the same kind of discussion we -- you have with different customers in Korea or Japan and everywhere. This is no doubt very unique market out there in China, it’s a big market, it’s an important market, because as you may know, an important growth in the electric vehicles is coming from China. That’s why the China producer, budget producers, cathode [ph] producers are very important and will be very important in the future. But, we don’t see a big difference in the negotiation process in the relation with these big customers that we have in China as compared to other countries.
嗨，克里斯。 让我评论一下，中国是一个市场，就像每个市场都有不同的客户，正如我之前解释过的那样，不同的客户，我们有不同的行业，不同的等级。 我们向中国的每一位重要客户销售产品。 这与我们的讨论相同 - 您与韩国或日本以及各地的不同客户进行了讨论。 这无疑是中国非常独特的市场，它是一个很大的市场，它是一个重要的市场，因为你可能知道，电动汽车的重要增长来自中国。 这就是为什么中国的生产商，预算生产商，阴极[ph]生产商非常重要，并且在未来非常重要。 但是，与其他国家相比，我们在与中国这些大客户的关系中谈判过程并没有太大差异。
Okay. Thank you. And just the last one for me, just on the public developments in solar salts. Can you talk about how that extra 400,000 tons, should we think about that split evenly over 2020, 2021 and 2022? And what sort of margins should we think about just in terms of the profitability of that division? Is it similar to other tons you saw in that division or is it a separate way of thinking about the profitability? Thank you.
好的。 谢谢。 对我来说只是最后一个，仅仅是关于太阳盐的公共开发。 你能谈谈这个额外的400,000吨，我们是否应该考虑在2020年，2021年和2022年之间平均分配？ 我们应该从该部门的盈利能力方面考虑什么样的利润？ 它是否与您在该部门看到的其他吨类似，或者它是一种单独考虑盈利能力的方式？ 谢谢。
Hi, Chris. This is Gerardo Illanes answering your question. Of course, the final delivery still will depend on production and the final discussions with the customer, when they actually need the product. But, it’s reasonable to expect something in the neighborhood of 150 next year, 250 the next one, and 50,000 [ph] the year 2022. That’s more or less how these contracts should be delivered.
Regarding prices and margins, it should be similar than what we have had in previous contracts. So, there should not be a change or a significant change there.
嗨，克里斯。 这是Gerardo Illanes回答你的问题。 当然，最终交付仍将取决于生产和与客户的最终讨论，当他们确实需要产品时。 但是，有理由期待明年150左右，下一个250左右，以及2022年的50,000 [ph]。这或多或少是这些合同的交付方式。
Okay, great. Thank you very much. That’s all for me.
好，太棒了。 非常感谢你。 这一切都适合我。
The next question will come from Andrew McCarthy of Citi.
Hi. Good afternoon, everyone. Thanks very much for taking my questions. My first one was, just following up on the comment on the impact of 3,000 to 4,000 tons in lithium this year. I just wanted to try and understand, there you’re referring to your expected sales for 2019, i.e. are you therefore saying rather than sort of 45 to 50 for this year, you may be seeing sort of 3,000 to 4,000 less than that now?
And then, my other question was regarding the iodine business. You mentioned tight market conditions. But at the same time, you talked about in the press release that you’re seeing similar to slightly lower levels of sales volumes this year. I just wanted to try and understand why that was the case, given the prices seem to be moving higher, but you’re saying you’re going to sell less this year. If you can provide some color to help us understand that would be great. Thanks very much.
你好。 大家下午好。 非常感谢您提出我的问题。 我的第一个就是对今年对锂电池产生3,000到4,000吨影响的评论。 我只是想试着理解，那里你指的是你2019年的预期销售额，也就是说你今年说的不是45到50，你可能会看到比现在少了3000到4,000？
然后，我的另一个问题是关于碘业务。 你提到了紧张的市场条件。 但与此同时，您在新闻稿中谈到，您看到今年的销量水平略有下降。 我只想尝试理解为什么会出现这种情况，因为价格似乎正在走高，但是你说你今年的销售量会减少。 如果你能提供一些颜色来帮助我们理解这将是伟大的。 非常感谢。
Okay. Thanks Andrew. I want to be very clear about 3,000, 4,000 metric tons. It’s our estimate about the reduction in the total demand of lithium in equivalent -- carbonate equivalent in China. It’s not itself. [Ph] We maintain probably -- and slight increasing our forecast volume sales for this year. From the beginning we said between 45,000 to 50,000 metric tons this year. I think, it’s going to be higher 47,000; that's what I expect today for this year as sales. But this reduction in China is not affecting us in volumes, our total global volumes we think, but it is affecting the price environment. The main reason to mention this 3,000 to 4,000 metric tons is that -- we think is the 13-day conditions and equilibrium between supply and demand and of course affecting the price environment worldwide. This is regarding the lithium question.
Regarding the iodine, if you review our sales, last year, our sales volumes grew 5%, I mean in 2018 as compared to 2017, reaching our record year in volume sales. If you compare 2017 and 2018, it’s very important that it’s aligned -- we expect that if you consider both years, the growth we expect this year and the growth we expect -- we had last year will be higher than 2.5% average. That is at the same level of the market condition, means in two years, we are growing according market.
好的。谢谢Andrew。我想非常清楚3,000,4,000公吨。这是我们对中国相当于碳酸盐当量的锂总需求量减少的估计。它本身不是。 [Ph]我们维持可能 - 并略微增加我们今年的预测销量。从一开始我们就说今年的产量在45,000到50,000公吨之间。我想，它会更高47,000;这就是我今天对销售的期望。但是，中国的这种减少并没有影响我们的数量，我们认为我们的全球总量，但它正在影响价格环境。提及这3000至4,000公吨的主要原因是 - 我们认为是13天的条件和供需之间的平衡，当然会影响全球的价格环境。这是关于锂问题。
关于碘，如果你回顾我们的销售情况，去年我们的销量增长了5％，我的意思是2018年与2017年相比，达到我们创纪录的销量年。如果你比较2017年和2018年，它是非常重要的，它是一致的 - 我们期望，如果你考虑这两年，我们预计今年的增长和我们预期的增长 - 我们去年将高于平均2.5％。那是在市场条件的同一水平，意味着在两年内，我们正在按市场增长。
Thanks very much.
The next question will come from Ben Isaacson of Scotiabank.
Hi. Thank you for taking my questions, three of them. First one is on the SPN business. Potash prices look like they're going to be a little bit weaker over the next few quarters. Can you talk about how that will impact SPN pricing and margins?
你好。 感谢您提出我的问题，其中三个问题。 首先是SPN业务。 钾肥价格在接下来的几个季度看起来会有点变弱。 您能谈谈这将如何影响SPN定价和利润吗？
Hi. We expect [indiscernible] when are you going to visit? I hope...
你好。 我们期待[音频不清晰]你什么时候去参观？ 我希望...
I’ll be down in a few months.
It’s going to be great. Of course, both as you saw, it’s the raw material in the production [Technical Difficulty] for our competitors, that's for sure. And different pricing in the potash is affecting the cost position and of course could affect in some way the potassium nitrate. If you’re review in the past, because we have had a lot of ups and downs in the potash in the last, I don’t know, 10 years, of course in some way affect but it’s not in the same effect of the potash price effect. It means when the potash price increases 15%, we don't expect to increase our potassium nitrate 15%. The same example, when the price goes down 15%, we don't expect to decrease our pricing 15% or the market price decrease 15%. It means our potassium nitrate pricing is more stable from potash pricing. But of course, having a high potash price is better for us; that's for sure. Because not only it affects potassium nitrate, it affects our potash industry. As you know, we are selling today -- we expect to sell 600,000 metrics this year and expect to sell close to 1 million tons next year [Technical Difficulty] sold like 1.3 million tons and 1.5 tons of potash. That's why I expect to be 1 million tons probably 2020 and come back to 1.3 million tons. And it’s important market for me, even though I’m very small in the potash industry. But, for me it’s important, for SQM it’s important and for potassium nitrate it’s important too. It’s a good news having the potash going up, yes. It’s a very good news in terms of the potassium nitrate, no, but it’s okay. [Ph]
这将是伟大的。当然，正如你所看到的，它是我们竞争对手生产[技术难度]的原材料，这是肯定的。钾肥的不同价格正在影响成本的位置，当然也会以某种方式影响硝酸钾。如果你过去一直在回顾，因为我们在最后的钾肥中经历了很多起伏，我不知道，10年，当然在某种程度上会影响但是它的效果并不相同钾肥价格效应。这意味着当钾肥价格上涨15％时，我们预计不会增加15％的硝酸钾。同样的例子，当价格下跌15％时，我们预计不会降低我们的定价15％或市场价格下降15％。这意味着我们的钾硝酸盐定价从钾肥定价更加稳定。但是，当然，钾肥价格较高对我们来说更好;这是肯定的。因为它不仅会影响硝酸钾，还会影响我们的钾肥行业。如你所知，我们今天正在销售 - 我们预计今年将出售60万个指标，并预计明年将出售近100万吨[技术难度]，销售量为130万吨和1.5吨钾肥。这就是为什么我预计2020年可能达到100万吨，然后回到130万吨。对我来说这是一个重要的市场，尽管我在钾肥行业的规模很小。但是，对我而言，重要的是，对于SQM而言，重要的是硝酸钾也很重要。钾肥上涨是个好消息，是的。就硝酸钾而言，这是一个非常好的消息，不，但没关系。 [PH]
Perfect. Thank you. My second question on lithium costs. If we take out royalties, it looks like you've got your costs down quite nicely in Q2 over Q1. My estimate is roughly $4,000 a ton, excluding the royalties. Can you talk about whether that's as low as you expect them to go or is there more room for improvement?
完善。 谢谢。 关于锂成本的第二个问题。 如果我们拿出版税，看起来你的成本在第二季度比第一季度下降得相当不错。 我估计每吨大约4,000美元，不包括特许权使用费。 你能谈谈这是否与你期望的一样低，还是有更大的改进空间？
I think, Ben, it’s some mistake in the numbers. If you subtract the royalty to quarter that keep in mind that we put a table of the royalty in our web page, if you want to review it in one press release in the past, it's available for everyone. I think that our cost in some ways similar to the cost of the first quarter, maybe a slightly higher, as far as cost without considering royalties and the reasons that we're selling because the average cost of inventory, we’re selling product from the first quarter, and during the first quarter -- within the first quarter, our cost was slightly higher because it was the [indiscernible] of the new facility and we have some additional annexure. In the future, now we have a very good news from the lithium plant. I'm more than happy today to inform you that the plant is producing at 200 tons per day, means close to the 70,000 metrics tons. The only reason why this year we expect is close to 60,000 metric tons is because we're changing some equipment, improving some areas of supply. That's why we have to maintain on time in order to do it. But the total production capacity, we already reached the 70,000 and more than sure that next year, we will produce something more than 70,000. And the most important thing is that all the production will be according to commercial requirements in terms of spec. That's why the technical spec will be according to commercial need, and we will produce more than 60,000. And the other good news is that of course the total cost I expect will be lower than today because we will be producing more lithium in the same facility producing every single day. That's going to be good. Anyway, let me remind you that the figure with the -- Gerardo, if you can explain where we can find the lease payments to Corfo?
我想，Ben，这是数字中的一些错误。如果您将版税减去季度，请记住我们在网页上放置了版税表，如果您想在过去的一个新闻稿中对其进行审核，那么每个人都可以使用。我认为我们的成本在某些方面类似于第一季度的成本，可能略高，至于成本而不考虑特许权使用费和我们销售的原因，因为库存的平均成本，我们销售的产品来自在第一季度和第一季度 - 第一季度，我们的成本略高，因为它是新设施的[音频不清晰]，我们还有一些额外的附件。在未来，现在我们从锂电厂获得了一个非常好的消息。今天我非常高兴地通知您，该工厂每天生产200吨，意味着接近70,000吨。今年我们预计接近60,000公吨的唯一原因是因为我们正在改变一些设备，改善了一些供应领域。这就是为什么我们必须按时维持才能做到这一点。但是总产能，我们已经达到了7万，而且肯定明年我们将生产7万多件产品。而最重要的是，所有生产都将根据商业要求进行规范。这就是为什么技术规范将根据商业需求，我们将生产超过60,000。而另一个好消息是，我预计的总成本当然会低于今天，因为我们将在每天生产的同一工厂生产更多的锂。那会很好。无论如何，让我提醒你，与Gerardo的数字，如果你能解释我们在哪里可以找到Corfo的租赁付款？
Yes. Remember that the table that we use to calculate the lease payments to Corfo for lithium carbonate is different than the table of lithium hydroxide. And unfortunately, we don't disclose the breakdown between lithium carbonate and lithium hydroxide. So, for you, it's somewhat different -- difficult to get to the precise number. But, as Ricardo was mentioning, the trend that we're seeing in the cost and what we expect going forward.
是。 请记住，我们用来计算Corfo对碳酸锂的租赁付款的表与氢氧化锂表不同。 不幸的是，我们没有透露碳酸锂和氢氧化锂之间的分解。 所以，对你来说，它有些不同 - 很难达到准确的数字。 但是，正如里卡多提到的那样，我们在成本中看到的趋势以及我们对未来的预期。
Very helpful. A very last question, I'm not sure if you want to answer it. You talked about $10,000 roughly in guidance for Q3. Can you talk about how -- and you talked to also that you're already focused on Q4. So, for July and August, how did those dollar values or those prices trend? And maybe you probably have insight into September as well. Really it's breaking that dollars down on a on a monthly basis.
很有帮助。 最后一个问题，我不确定你是否想回答这个问题。 你在第三季度的指导中谈到了大约10,000美元。 你能谈谈如何 - 你还谈到你已经专注于第四季度。 那么，对于7月和8月，这些美元价值或那些价格趋势如何？ 也许你可能也对九月有所了解。 实际上它正在按月打破美元汇率。
Yes, I understand. But, we don't break -- we don’t give the numbers per month. And I think the best reasonable way to do it is as an average per quarter. There is a different customer and different months, different industry and so on. And I think, the average per quarter is a better number. We don't disclose per month. And I repeat, we expect at an average pricing for the quarter close to $10,000 per ton.
是的我明白。 但是，我们不打破 - 我们不会每月给出数字。 我认为最合理的方法是每季度平均一次。 有不同的客户和不同的月份，不同的行业等。 我认为，每季度的平均数是一个更好的数字。 我们不会每月披露。 我再说一遍，我们预计该季度的平均价格接近每吨10,000美元。
That’s very helpful. Thanks so much, guys.
The next question will come from César Pérez-Novoa of BTG Pactual.
Good morning, gentlemen. Lithium tonnage in 2020 is expected to grow between 30% or 40%. What demand growth is embedded in that guidance, and is that figure based on hard contracts or how your business -- on your view on how your business should roll in 2020? And if I may have a second question as well and relates to China. Can you please state as a proportion of sales, how much was sold to that specific country in the second quarter, whatever form you may want to express that, in volume or revenue? Thank you.
先生们，早上好。 预计2020年的锂吨位将增长30％或40％。 该指南中包含了哪些需求增长，以及基于硬合同或业务方式的数据 - 您对2020年业务应该如何展开的看法？ 如果我可能还有第二个问题并且与中国有关。 您能否请说明销售比例，第二季度向特定国家/地区销售的数量，以及您可能想要表达的数量，数量或收入？ 谢谢。
About your questions on lithium, the first question was -- sorry…
关于锂的问题，第一个问题是 - 对不起......
How to get to 65…
Okay. You’re right. I mean, you’re right that we expect a growth for next year higher than the market growth. That’s for sure. The reason behind that is that if you review our volume sales in the last four years including 2019, SQM volume was quite favorable at 47,000, 48,000 per metric ton. It means, of course with the market growing and SQM volume sales stable, the reason behind that was the production restriction. And what we are doing next year is to, in some way, recover our market share participation. And in order to do so, we move to the 65,000 metric tons in order to have this market share participation that I think is a reasonable market -- a strong and a reasonable market share for SQM. And we expect that to grow maybe just a little bit higher than the market, maybe, in the 2021. So, that’s why we are moving to a 120, 150 and probably next step will be 200,000 metric tons. We are working now, as we speak, in the program and our commercial three-year program to allocate 65,000 metric tons. And we know how to do it, we have a clear plan in order to do it and we will execute the plan next year. And the main reason to do it now, next year is, because we’re going to have all the production, we’re going to produced around 70,000 metric tons, that’s very important. Followed then, according to market, technical spec -- specification that will allow us to have the first inventories, increase our sales, and to have a logistic and inventories increased there to sale the 65,000 metrics tons next year. This is the first question.
And your second question is the breakdown of our total volume sales per country. We don’t do that -- we don’t have the numbers in front of me anyway of breakdown. Let me check it internally, first if we’re going to release this information. And if we do so, we will publish this information publicly in the 6-K. Let me review it internally with our [Technical Difficulty] we’re going to do so. But anyway, I don’t have it in front of me.
好的。你是对的。我的意思是，你是对的，我们预计明年的增长高于市场增长。这是肯定的。这背后的原因是，如果你回顾过去四年（包括2019年）的销量，SQM的销量非常有利，为47,000，每公吨48,000。这意味着，当然随着市场的增长和SQM销量的稳定，其背后的原因是生产限制。我们明年要做的是以某种方式恢复我们的市场份额参与。为了实现这一目标，我们将进入65,000公吨以获得这种市场份额，我认为这是一个合理的市场 - SQM的强大且合理的市场份额。我们预计，在2021年，可能会比市场增长一点点。所以，这就是为什么我们要转向120,150，可能下一步将是200,000公吨。正如我们所说，我们现在正在计划和我们的商业三年计划中分配65,000公吨。我们知道如何做到这一点，我们有一个明确的计划，我们将在明年执行该计划。现在明年这样做的主要原因是，因为我们将要生产所有产品，我们将生产约70,000公吨，这一点非常重要。随后，根据市场，技术规格 - 规格将允许我们拥有第一个库存，增加我们的销售，并有一个物流和库存增加那里销售明年65,000吨。这是第一个问题。
而你的第二个问题是我们每个国家的总销量的细分。我们不这样做 - 无论如何我们都没有在我面前的数字。让我在内部检查，首先是否我们要发布这些信息。如果我们这样做，我们将在6-K公开发布此信息。让我在内部审查我们的[技术难度]，我们将这样做。但无论如何，我没有在我面前。
All right, all right, fair enough. Thank you, Ricardo.
The next question will come from Joel Jackson of BMO.
Hi. Good morning, everyone. I have three questions. I’ll ask one at a time, please. On the brine extraction, so I think you have the right to extract as high as 1,500 liters a second. Because of a couple of reasons the last year or two, that’s gone down to I think a 1,000 or 1,100. You’re now suggesting that you’re getting more relief on that. So, what would you expect your brine extraction to be next year to get to 1 million tons for merchant potash sales volume? And then, what do you expect that to increase beyond that? Thank you.
你好。 大家，早安。 我有三个问题。 我会一次问一个。 关于盐水提取，我认为你有权每秒提取高达1,500升。 由于过去一两年的几个原因，我认为是1000或1,100。 你现在建议你对此有更多的解脱。 那么，您认为明年你的盐水提取到商业钾肥销售量达到100万吨会怎样？ 然后，你有什么期望增加超过这个？ 谢谢。
As I explained during the conference at the beginning, we are now moving in the right direction. It means that total volumes will be 600,000 metric tons this year that is more than originally anticipated. We are working as we’re speaking the technical plans for next year. It’s not so easy because we have solutions, we took the solutions on pond, and we need to wait until we have the final thought. But, my estimate today that could change that we can reach something closer to 1 million tons next year in terms of potash and probably something more in 2021. I expect during the next conference call to have a very accurate number about that and we will release these numbers. What we are having now is going to back to the original approved extraction that we had the approval before the reduction that we had for couple years. That’s exactly what we are doing. It didn’t affect the possibility to produce lithium but it affected our possibility to produce potash and now we are recovering the potash production.
Okay. Back on lithium, I know that the China lithium question has been asked several times. I'd like to ask a little bit different angle, which is -- it does seem like prices are coming really low in China, some of the pricing you sold. Is this because you are having issue, means back for some of your products, and so you have to sell it some of these lower quality opportunities or you are specifying your productions by you're good quality product, but this is where the incremental demand is at these lower priced customers in China?
好的。 回到锂电池，我知道有几次问过中国锂问题。 我想问一个不同的角度，就是 - 看起来中国的价格确实很低，你卖的一些定价。 这是因为你有问题，对你的某些产品来说意味着什么，所以你必须把这些低质量的机会出售给你，或者你指定你的产品是你的优质产品，但这是增量需求的地方 是在中国这些价格较低的客户？
Joel, as I explained before, we sell to different customers, different specifications, different industries, and all of them, they have different requirements. But anyway, when I said that during third quarter, and I want to be very clear about that, when we said that during third quarter we are expected to be $10,000 per ton, we expect that all the products we sell during the quarter will be according customary specification. We are not selling out of spec product; we are selling different products for different needs of different markets around the world.
Joel，正如我之前解释的那样，我们向不同的客户，不同的规格，不同的行业和所有客户销售，他们有不同的要求。 但无论如何，当我在第三季度说到这一点时，我想对此非常清楚，当我们说在第三季度我们预计每吨10,000美元时，我们预计我们在本季度销售的所有产品都将是 根据惯例规范。 我们不会销售超出规格的产品; 我们正在销售不同的产品，以满足全球不同市场的不同需求。
Okay. And finally, on hydroxide, you’re looking to more than double hydroxide expansion again here by 2021. Right now, if I calculate rightly, I mean, hydroxide premiums, you are not really making any margin really to upgrade carbonate [ph] hydroxide. You are not going to have the Australian JV for some years. Is this something you have to do right now to meet customer needs? Because I think ideally maybe you’d want to have your hydroxide production coming out of Australia down the road.
好的。 最后，关于氢氧化物，你想在2021年再次将氢氧化物扩大一倍以上。现在，如果我正确地计算，我的意思是氢氧化物溢价，你真的没有任何余地来升级碳酸氢盐[ph]氢氧化物。 多年来你不会拥有澳大利亚合资企业。 这是您现在必须做的事情，以满足客户的需求吗？ 因为我认为理想情况下你可能希望你的氢氧化物生产来自澳大利亚。
You're right in terms that the equilibrium of the needs from the hydroxide and the carbonate is changing, the type of batteries they are going to produce in the near future, plus it's changing because most of the new production from Australia is trying to target hydroxide market. We have this capacity to produce lithium carbonate and some production of hydroxide. And we maintain and we will maintain this capacity in order to have full flexibility considering that we are going to be a full player with that the strong market share and we expect to supply all the needs of our customers. That's why having this capacity for us is very important as a strategy, but, of course we have the ability and the flexibility to sell more lithium hydroxide or to translate from lithium hydroxide to lithium hydroxide carbonate depending what is the real situation of our main customers.
你认为氢氧化物和碳酸盐的需求平衡正在发生变化，他们将在不久的将来生产的电池类型，以及它的变化是正确的，因为澳大利亚的大部分新产品都试图以 氢氧化物市场 我们有能力生产碳酸锂和一些氢氧化物。 我们保持并且我们将保持这种能力，以便拥有充分的灵活性，因为我们将成为具有强大市场份额的完整参与者，并且我们期望满足客户的所有需求。 这就是为什么拥有这种能力作为一种策略非常重要的原因，但当然我们有能力和灵活性销售更多氢氧化锂或从氢氧化锂转化为氢氧化锂碳酸盐，这取决于我们主要客户的实际情况。
The next question will come from Isabella Simonato of Bank of America.
My questions are lithium as well. First of all, looking more to short-term prices. We saw already a pretty big decline in July prices versus what happened in Q3. And considering your guidance of $10,000, it might seem a little bit optimistic considering where we are seeing the market price. So, is it possible for you to give us a little bit more color how prices should evolve throughout Q3 and Q4? And if possible, also, what do you expect in terms of mix between carbonate and hydroxide? That would be my first question. And the second one, longer term, considering that most of the growth of lithium demand should come from China and the grade, and as we saw this quarter, right, the mix seems to be a little bit worse. It's fair to assume that looking at prices in China should be in the medium term the benchmark to your prices?
我的问题也是锂。 首先，更多关注短期价格。 我们看到7月份的价格与第三季度相比已经出现了相当大的下滑。 考虑到您对10,000美元的指导，考虑到我们看到市场价格的位置，看起来似乎有点乐观。 那么，您是否有可能在第三季度和第四季度向我们展示价格应该如何演变？ 如果可能的话，您对碳酸盐和氢氧化物之间的混合有何看法？ 这将是我的第一个问题。 第二个是长期的，考虑到锂需求的大部分增长应该来自中国和等级，正如我们在本季度所看到的那样，混合似乎有点差。 可以假设，在中国看价格应该是中期价格的基准吗？
First, as I mentioned you before, we are not disclosing today because we don't have the understanding or estimate of the [Technical Difficulty], we’re starting negotiation prices with some of the customers, some of them about third quarter, as I already mentioned to you that it is the average pricing. You have many publications of pricing of people publishing in internet different pricing in China. I don't know where they get it. They say prices -- for example, some publications say pricing in China is $6,000 per metric. And we are not selling at $6,000 per metric ton today in China. I don't know where the numbers are coming from. And when I say that -- the average is the average, and it’s what we expect for this quarter.
You are right, the China is important in the lithium industry in the future, it’s important today and will be important in the future but it’s not the only market. Keep in mind, the electric vehicle growth is something very important in Europe, in India, in Southeast Asia, in the United States, going to be very important in next two years. That's why China, even though is, if I am not wrong, close 20% to 25% of the market of the electric -- of the cars today, overall cars, very important, it’s not the only market. And that's why you need to consider a full global average in the market. And that's why China is not the benchmark. It’s part of the average of the world. And I don't foresee that China quality will be lower or China production will be with different quality production than other countries in the world. That's why I don't foresee in the long term pricing in China different than pricing all around the world. It means every single customer in the world will produce high-quality products and they will require high-quality lithium and they will produce high-quality cars, and it means that they will buy at the same price everywhere. It means that price will be quite stable around the world in the long-term. China is going to be part of the game. But again, we expect and repeat our outlook of the third quarter, and we want to have better information to have an outlook of the fourth quarter next year about lithium prices.
首先，正如我之前提到的那样，我们今天没有透露，因为我们没有对[技术难度]的理解或估计，我们正在与一些客户展开谈判价格，其中一些是第三季度，我已经向你提到它是平均价格。您有很多关于在中国以不同价格在互联网上发布的人的定价的出版物。我不知道他们从哪里得到它。他们说价格 - 例如，一些出版物称中国的定价是每公尺6,000美元。而且我们今天在中国的每公吨售价不到6,000美元。我不知道数字的来源。当我说 - 平均值是平均值时，这是我们对本季度的预期。
你是对的，中国在未来的锂工业中很重要，它在今天非常重要，并且在未来很重要，但它不是唯一的市场。请记住，电动汽车的增长在欧洲，印度，东南亚和美国非常重要，在未来两年内将变得非常重要。这就是为什么中国，即使是，如果我没有错，关闭20％至25％的电动车市场 - 今天的汽车，整体汽车，非常重要，它不是唯一的市场。这就是为什么你需要考虑市场上的全球平均值。这就是为什么中国不是基准。它是世界平均水平的一部分。我并不认为中国的质量会降低，或者中国的产量会与世界上其他国家的产品质量不同。这就是为什么我没有预见到中国的长期定价与全球定价不同。这意味着世界上每一位客户都将生产出高质量的产品，他们将需要高质量的锂，他们将生产高质量的汽车，这意味着他们将以相同的价格在各地购买。这意味着从长远来看，全球价格将保持稳定。中国将成为比赛的一部分。但同样，我们预计并重复我们对第三季度的展望，我们希望获得更好的信息，以了解明年第四季度锂价的前景。
That's clear. Just one follow-up. I mean, despite the selloff in prices, you’re still quite profitable on lithium. Is there any price label you would stop expanding capacity?
这很清楚。 只需一个跟进。 我的意思是，尽管价格下跌，你仍然可以在锂上获利。 是否有任何价格标签你会停止扩大产能？
Definitely not. We -- I want to be very clear that we are the lowest cost producer in the world. We will continue to be the lowest cost producer in the world. I will expand and my capacity will be raised 100% according commercial need at the end of 2021, 120,000 metric tons, and we are moving as fast as we can in order to have the 160,000 metric tons at the end of the year 2023. That’s for sure, we will be there, and we’ll have a lot of profits doing so, because it’s a very good business for us and we have very low cost.
当然不。 我们 - 我想非常清楚我们是世界上成本最低的生产商。 我们将继续成为世界上成本最低的生产商。 我将扩大，我的产能将根据2021年底的商业需求增加100％，120,000公吨，我们正在尽可能快地移动，以便在2023年年底获得160,000公吨。这是 当然，我们会在那里，我们将有很多利润这样做，因为这对我们来说是一项非常好的业务，而且我们的成本非常低。
That’s very clear. Thank you.
This concludes our question-and-answer session. I would now like to turn the conference back over to Gerardo Illanes for any closing remarks.
这就是我们的问答环节。 我现在想把会议转回Gerardo Illanes的任何结束语。
Thank you. Before finishing the call today, let me remind you that we are hosting our Investor Day in New York, on September 10th. Details are on our website, in case you want to register. You can go there and follow the instructions there. Thank you all very much for joining us today. And we hope to see you on September 10th or on our next conference call. Goodbye.
谢谢。 在今天结束通话之前，请允许我提醒您，我们将于9月10日在纽约举办投资者日活动。 详细信息在我们的网站上，如果您想注册。 你可以去那里按照那里的指示。 非常感谢你们今天加入我们。 我们希望能在9月10日或下次电话会议上与您见面。 再见。
Thank you. The conference has now concluded. Thanks for attending today’s presentation. You may now disconnect your lines. Have a great day.
谢谢。 会议现已结束。 感谢您参加今天的演讲。 您现在可以断开线路。 祝你有美好的一天。
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