Chilean lithium producer SQM's share prices have gone down by 13% in less than a week to stand at $50.71 at the close of the market on Wednesday February 28, compared with $58.32 on February 23.
Investors' fears of oversupply in the lithium market were triggered on February 26 with the release by investment bank Morgan Stanley of research suggesting that the price of lithium could fall by 45% by 2021 because of the planned expansion of lithium production in Chile by that year.Consequently, SQM's share value dropped despite the announcement by the company on Wednesday of solid results for 2017.SQM's earnings increased by 53.6% to $427.7 million for the full year of 2017, from $278.3 million in the full year of 2016.The robust results achieved in 2017 were a result of strong lithium demand alongside the significantly higher prices achieved for lithium compounds throughout the year, chief executive officer Patricio de Solminihac said."We achieved the same sales volumes in our lithium and derivatives business in 2017 as in the previous year, but prices increased by 25%, with the average price rising to more than $13,500...