FMC Plans IPO As Lithium Export Values Soar, Chilean Risks Mount — Panjiva
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FMC Plans IPO As Lithium Export Values Soar, Chilean Risks Mount

Argentina 39 Chile 51 China 1758 Financing 85 Materials - Metals/Mining 482 U.S. 3297

FMC will launch an initial public offering of 20% of its lithium mining subsidiary Livent to raise $100 million, S&P Global Market Intelligence reports. Livent sources lithium from Argentina whereas its largest competitor, SQM, is focused on Chile where water shortages may disrupt supplies according to Reuters.

Such a disruption would follow a surge in Chilean exports, including a 13.7% increase in exports in the second quarter, Panjiva data shows. That was led by a 47.7% surge in shipments to South Korea which came at the expanse of Chinese buyers which saw imports drop 29.3%.

SOUTH KOREAN BATTERY MAKERS BATTER CHINA’S

Chart segments Chilean exports of lithium dioxide and carbonate by destination.   Source: Panjiva

An interruption to Chilean exports could also exacerbated the surging cost of lithium for battery manufacturers. The average export value per ton reached a record $14,093 per ton in June, up 25.2% since the start of the year.

SELLING MORE FOR A LOT MORE

Chart compares Chilean exports of lithium dioxide and carbonate by weight and by value per ton on a monthly (dotted) and annual average (solid) basis.   Source: Panjiva

A shortfall in SQM’s production in Chile would also help FMC cement its lead in the U.S. market where its shipments outnumbered those of SQM by 5.4x in the 12 months to August 26.

FMC ALREADY RULES AMERICA’S LITHIUM MARKET

Chart segments U.S. lithium dioxide and carbonate imports by shipper and origin for the 12 months to August 26.   Source: Panjiva

Similarly such a drop would help FMC diversify its exports from Argentina to China. In the first quarter Chilean supplies accounted for 44.5% of imports vs. Argentina’s 30.3% but the latter relied on five buyers for 88.1% of its supplies vs. 75.6% for Chile.

DIVERSIFICATION NEEDED FOR ARGENTINE SUPPLIERS TO CHINA

Chart segments Chinese lithium dioxide and carbonate imports by origin and consignee for the first quarter of 2018, denominated in dollars.   Source: Panjiva

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