[ferro-alloys.com]After years of double-digit expansion, global demand for lithium may not grow at all this year as the coronavirus pandemic paralyzes economic activity, one of the world's largest producers of the mineral has said.

"We believe that demand in 2020 will be impacted by the global COVID-19 pandemic, and that 2020 market demand could be similar to levels seen last year," Chile's SQM warned in its latest financial results released late Tuesday.

SQM has the capacity to produce around 70,000 mt/year of lithium carbonate from its operations on northern Chile's Salar de Atacama, considered the world's richest lithium deposit. It had previously forecast lithium demand to grow by almost a fifth this year, up from 14% in 2019.

The company said its own sales of lithium products fell to 8,600 mt during the first quarter, down almost a fifth from a year ago, as the global health emergency hobbled marketing efforts, especially in Asia.

Combined with the sharp in lithium prices, which have fallen by almost a half since a year ago, the company's revenue from lithium sales fell 58% to $65.3 million

"Our sales during the first quarter of the year were significantly impacted by the COVID-19 pandemic, and it is reasonable to expect that along with the rest of the world, we will continue to see impacts," said CEO Ricardo Ramos.

With the fallout from the outbreak still playing out, the immediate outlook is cloudy.

"Current global economy conditions are uncertain, making it difficult to predict the future supply and demand of the markets in which we participate," Ramos said.

But SQM remains confident in the long-term fundamentals for lithium as carmakers switch to the production of electric vehicles and said that it expects lithium sales to improve during the rest of the year.

By boosting its share of the global lithium market, SQM said that it still expects to lift lithium sales this year despite stagnant demand but warned that its sales estimate for 2020 of 55,000-60,000 mt of lithium products, announced last March, could change.

"We have seen some markets starting to get back to normal levels of activity while in some others, the economic activity continues at weaker levels," Ramos said.

SQM confirmed it was continuing with projects to expand its production capacity in northern Chile for lithium carbonate to 120,000 mt/year and lithium hydroxide to 8,000 mt/year by the end of 2021.

However, the company has cut panned investment for this year to $350 million, down from $450 million previously.

Total profits fell to $45 million in the quarter, down 44.1% from a year ago, largely due to the decline in lithium prices.

(S&P Global Platts)

• [Editor:王可]