Q4 2020 Sociedad Quimica y Minera de Chile SA Earnings Call
Good morning, and welcome to the F. Q M fourth quarter 2020 earnings conference call all participants will be in a listen only mode.
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I would now like to turn the conference over to Kelly O'brien head of Investor Relations. Please go ahead.
Good morning, Thank you for joining our fourth quarter 2020 earnings Conference call. This conference call will be recorded it is being webcast live on.
On this call will be able to access the webcast on our website www dot SQL dot com on Earth.
<unk> press release on the presentation with a summary of the results has been uploaded to our website, where you can also find a link to the webcast. Thank you talked on the call today will be Ricardo Ramos CEO or CFO. So total yeah.
And our commercial vice president of lithium and iodine.
Asia Pacific could be based on that.
We will also be available to help answer any questions. Following the prepared remarks before we begin let me remind you that statements on this conference concerning the company's business outlook future economic performances anticipated profitability revenue expenses or other financial items anticipated cost synergies orthotics.
Volume growth together with other statements that are not historical facts are forward looking statements as that term is defined under federal Securities law I'm on.
We're looking statements on Epsilon robust, reflecting the best judgment of SQL.
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 and clothing, our ability to successfully implement our sustainable development plant rich.
Risks uncertainties and factors that could affect the accuracy of such forward looking statements are identified in our public filings made with the U S Securities and Exchange Commission and in our earnings release issued last night on me.
These forward looking statements should be considered in light of those factors, we assume no obligation to update such statements whether as a result of new information future developments or otherwise except as required by law I now leave you with our Chief Executive Officer, Todd I'll put on.
Good morning, and thank you joining the call today.
2020 beyond with certainty we are more than satisfied with the changes that we have seen in the markets in which we participate the significant advances we have made to our sustainable development block on of course duration on succeed.
Throughout the year, especially related to lithium production.
Before discussing the results in more detail I'm proud to announce that we are the first lithium mining company in the world to joined initially for responsible mining assurance beautiful for years, we have built a sustainable operation in an effort to protect the environment.
Our neighbors and communities contribute to sustainable to industry leaders.
It is part of our commitment to a high level of transparency seeking public reports stability of the depth, we have established related to environmental matters.
They never liberation social responsibility.
It also leads to the role we play in the value chain of his strategic industries from human development, including electric on sustainable model, we hit the market with new World energy on sustainable work.
This before and I would with day rates again, our dedication to the goals of our sustainable development plan Spud on now we look forward to share you continue on classes related to eat in the future.
Looking back on 2020, yeah on a lot of positive things to mention starting with our lithium carbonate production, which surpassed the 70 south to Mexico on the year.
Our adjusted for the year related to volume cost and quality of the projects that we have been introducing uncertain, allowing us to increase our market share on expanding our customer day operates on very social feed our sales volume since 2020 right on with 43%.
All in reported last year, reaching a company record.
In the fourth quarter, our sales volume reached almost 46000 metric tons or about 34%.
On the service what is reported in the same period last year.
This was part of her with plant and continues to be.
Hard to probably start to equal moving forward said last night is a clear sign that we are prepared to continue to grow rapidly and support the strong demand growth in the lithium industry.
Our new lithium carbonate expansion moving for us as scheduled and we expect to reach 30000 metric tons by the end of this year and how did on 80000 metric tons at the end of 2023.
Addition to Chile investment for the mold on decent project was approved last month that day.
Hey, good flexibility studied from Crimson expected in Egypt production capacity of 50000 metric tons of battery grade lithium metric side with first production coming on line during the second half of 2024 before much sorry pardon me.
On a received as anticipated.
We believe that one of the lowest cost producers of lithium based project will also be complete competitive position at the cost curve.
Lithium is an exciting market on one person many growth prospects I would be remiss. If I did not mentioned yogurt opportunity just as we were able to take advantage of.
The students themselves on 'twenty.
That sort of chemical business line, which represent about 90% of the gross profit of the company last year, mostly related to sales force.
Williams of more than 160000 metric tons of solar salts, which over 66000 metric tons were delivered during the fourth quarter of 2000.
So at some point in 2021, we expect to deliver it goes to had to touch on Mitch dose.
So we believe that we are prepared to satisfy the market needs with annual volume. So over 200000 metric tons from solar Salt score went for.
Daniel You had noted I do see so that's the I think market was impacted by the global total damaging diesel standpoint, we believe that the total market demand decreased approximately 9%.
We're optimistic that we will see markets incorporate during 2021 day impact of the pandemic fades away mostly dead on it.
Right conscious media LTE on pharmaceuticals market, we hope to increase market share during the year on we're confident that the non growth going forward, we're required new capacity like the one we announced last December.
Again, what I've been on a lot of positive news to share about 2020.
Full year net.
Various challenges most of which were able to overcome as a result of the airport and dedication of our team who know what acres on a neighboring communities. They won't be if everyone will remain our priority.
I want to thank each and every person on the accomplishment on the results we were able to achieve in 2000 accounts.
Operator with that we'll turn it over to questions.
Thank you we will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing on Q.
To withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
And our first question will come from Joel Jackson with BMO capital markets. Please go ahead.
Hi, good morning.
We're cargo you know we've seen a dramatic turn in the lithium market in the last six months spot price is around China and around the world inventories look a lot more outright tight on your commentary last night in the release was that you could see higher lithium pricing in the first half of the year could you expand on that.
<unk>.
Wouldn't you have to see very strong price increases in the first half of the year now and maybe talk about any changes you're seeing right now and how lithium customers werent turned back on contract price products et cetera.
Hi, Joe.
Good day know about you but.
Yes.
Yes, we are relatively optimistic about pricing because that's right. So that's what we are observing.
Or should we think that average prices this year it should be true the higher day last year, that's on average prices.
However, you if I know, Brian you used the word strong Brian to some grease on the wrong.
We don't foresee a strong price increase that we probably before see five or six years ago in a short period of time.
That's why we prefer it to be more.
On conservative about that prices aren't going to be better.
Hi, Good day last year, but we don't expect neither strong price increase.
As you know Philip is with US now on you.
But maybe you want to add something about these specific situations the pricing in lithium.
Yes, no I would like a hello, Joe and I would like to do on.
Perhaps the with regard to what you're saying.
The fact that the market is still very volatile so and we have seen in the past months.
Very rapid de.
It reduces them.
Increases on price.
So being in such an early stage of the year I would prefer to be cautious about what the what the market price will be over the coming months.
The only thing that.
We feel it will happen and stuff.
Yeah, our price should be higher than it would be about.
The level I cannot commit now.
Yeah.
Okay, a couple more questions.
Okay.
Okay. So you know when you put out your sustainability targets.
Targets on plan I think in October you talked about now, it's tracking less brine and producing less potash or personalized potash, having less potash from merchant sales when I look at your outlook for 'twenty one.
You are talking about similar potash merchant potash sales in 'twenty. One you were talking about N O P sales being up and you're doing really well on lithium production.
So.
Is this where you're not extracting less Bryan this year or are you producing more material now.
Better yield.
From the pond, while extracting less Brian.
Okay, Joe first.
It's important to say that we're very proud of the technology on.
Research and development advances in this a lot.
That's a year to date, we can produce more with fevers, Brian and we hope to continue improving that way, we believe that in the long true will be able to produce 180000 metric tons of lithium carbonate from here with 50% of the brands would use in 2000 on 'twenty.
At the same way, we hope to increase on with deals in the extraction of potash. However, as we have said previously the lower extraction O'brien will affect the potash production capacity in the long true anyway. If you go to the 2000 on 'twenty. One I think it's important to try to focus on day. This.
And this year specifically.
We project sales volume for both us close to 10% higher than the previous year on it means that we are using some of our inventories were being improving on where our deals on our production capacity, but in the long term, it's important to consider that even though we had the name.
We increased our total production of lithium carbonate, we will not be able to increase in the same way the production of four touched on probably the total potash production will be reduced in the long term.
Okay.
My last question would be on iodine. So what I think is very impressive is obviously with all of the things that happened with Covid and the macro you saw a large iodine sales volume decline in 2000 22020.
But your per ton costs were a lot lower can you talk about that were there things that you did is just accounting how are we able to GAAP per ton costs lower.
Despite.
Yeah, much lower volumes.
Yeah, it's important to consider that we have been working for I don't know three or four years, maybe more in different initiatives to reduce overhead costs from the leaf indeed in every single business line.
You May know we produce from the same process from the collegiate nitrates, we shared the cost side. We are proud to say that both schools start going in the right direction, even though nitrogen it's more difficult to reduce the costs, we have been able to reduce costs and day are you named deposits that's right on.
We're very proud about it.
But again, we are we have a lot of it is Charlie.
Challenge about cost from the short term exchange rate in Chile.
<unk> is one of them yeah. The high price of course here is I think a Y because it means that the day labor day the day the market of the different.
Factors from the North of Chile is going to be more expensive, probably this year than what used to be.
But we have a very good experience on we have a very good track record in order to reduce our costs increase on what productivity and we're working very hard to to overcome to be able to maintain a very low cost position, even though these two situations that already mentioned to you the exchange rates last day.
The high cost of the LIBOR on high cost of the day the contractors.
Contractors in the north of Chile, because the corporate price, but again, we're very proud about the calls on we expect to continue with the same training channel in the future.
Yeah.
Okay. Thank you very much.
Yeah on the next question will be from Ben Isaacson with Scotiabank. Please go ahead.
Thank you very much on good morning, everyone and congrats on a on a difficult 2020.
First question is on S. P N I, if I read it correctly I think you said that.
The market increased by 5% and you guys had volume down.
Maybe half a percent or so.
Can you split that up between N O P and the rest of the SPN business on.
And do you expect to lose market share or gain market share in.
In 2021, and both SPN and the MLP within SPM.
Okay.
Okay, I don't think it's a big difference between the different.
The products, we have an S. P. N I think the main reason of 2020 that you already mentioned is that.
As you can see if you review our sales for the quarter you can notice that our sales volume were really affected during the first half of the year.
Third point on fourth quarter volume sales were light.
Okay.
On it.
One for Chris.
Travel was so bad because it would seem to me the last day of the COVID-19 on.
For us considering initiatives positioning the market the first half with the use of very important.
A PDF of the ear.
That's why we were really effective at the beginning of the process, but if you can see the trend on the third quarter on fourth quarter.
So positive that that we think that it's reasonable to expect that.
Our sales volumes for the year 2021 would be how it gets on 2020 on the second point that it went on our D. C study if you consider the marketing spend time in 2020, even though the mine deposits weighted slightly lower than 2019 day margins per ton were higher it means that we've had been able to improve our.
Market conditions on improve our margins in the different markets, where we participate in to get yourselves from 'twenty as compared 2019, I expect to continue this trend in 2021 and I repeat again.
Saying that 2021 on volumes for specialty plant nutrition, including potassium nitrate on audit for July sitting on specialty plant nutrition business lines will be higher than 2020.
Thank you for that in terms of the Mount Holland project. Congrats on the approval of that can you just I haven't looked at less farmers to see if they put out any numbers, but can you talk about your decision to approve that project what are the kind of assumptions that youre using in terms of margins.
Prices and what type of return or are you looking for.
We prefer not to be shared with you our long term.
Expectation of the price of volume so the lithium business, we have different scenarios and we use different scenarios and not worry about ovation in every single of scenarios on the table. It was a good project. That's why we are very excited about the project more hold on.
You know, we're very positive about the future of lithium.
Business within this business in 2025 demand would be in expense somebody had to tell some metric tons. We think that multiple on would be that's the most important issue in the first point us in the first quarter don't be it cost curve at the world level.
Thank you.
Hold on it's a very good project up production of lithium hydroxide from a spodumene.
As a low cost probably no doubt about it we have a very good partner with with partners. We think that we have a lot of opportunities to continue to growth with them in the future.
And again the most important thing is a growing market out there and we strongly believe in the growth of the lithium market on block on the second key point is that we think we're in a really competitive projects in multiple on it means that we are going to be the first 25 or 30% of the class Corp. On the wall level. This is the most important factor to keep them.
In order to move forward with these partners.
Yes.
Last question from me your capital is going to be a fairly tied up over the next few years as you expand in lithium but when do you think a little bit further out I mean, you guys are going to generate a lot of cash.
How do you plan on on using net cash say in kind of three four or five years from now do you expect to continue investing in projects to maintain your market share in lithium do you think that'll be a change where you start to return capital to shareholders through higher dividends or buybacks, how do you kind of think about capital.
<unk> once all of the current expansions are complete.
Yeah.
Yeah.
As we speak we are working day in day.
Next our next our next step of production capacity on new projects around the world that is youre right. It means we are thinking about new projects. All the time I don't think that more or less the last project, we're going to develop outside Chile, I think it will be on a lot of opportunities where we can capture good opportunities to do business on we're working on it now we think that we can.
Growth again, and again in the 90% of our Europe business, we had our knowhow and knowledge of the lithium business that is very important for us on what we think we can move forward with that in the long long term.
Imation.
I want to mention to you that now we're working on studying we are reviewing that something potentially increasing our lithium hydroxide production capacity on we expect to inform the market whenever we are ready the amount, but I expect to move from 30000 to 60000 in the short term and the medium term story on <unk>.
We're working on these kind of projects now means we have very many different alternatives to do and of course as you mentioned before and we as a company we have a very is in a.
Hi dividend policy, so far it means we he eats up to the board I think it's up to the shortest meeting what is the dividend policy, but so far it's gone.
I mean, you shouldn't pay high dividends to their shareholders. It means some of the cash flow. We generate is used in order to pay dividends that's something.
Ford on it as part of the company.
Yeah.
Well at least in the fall.
Great. Thank you very much.
And the next question will be from Javier Martinez with Morgan Stanley. Please go ahead.
Thank you hydrocarbon Kelly so let me pick up on the shelf that switched into talking about new plans for the future no.
Maybe you can update us on a bit on the on on this next capacity increases that you have seen come on.
I hope you saw on lithium hydroxide no maybe on a bit of information on updated information on the timing volume of course on production.
If you are able to share something with us.
Yeah. As you May know, we were really busy now because we are moving from 70000 now we are producing more than 70000, we're very proud about it but we're moving to 120000 metric tons on we expect to be ready at the end of this year. It means it's not a minor expansions moving from 70, that's really two days more than 80.
Moving 40 to 50000 metric tons increase it's like a huge you probably you can do all that we're working on where speak very hard in order to be ready from the day number one producing all the production. They had been on 20000 full quality do you know if he's here, but it's not enough as you know we're moving from 122 had been in Asia.
With an additional 60000 metric tons capacity on.
At the end of 2023, 'twenty 'twenty two sorry.
A lot of work 23, sorry on that.
Why we do expect to have a lot of things to do on and.
We're really pleased about that but if you can see that we are moving 250, <unk> hundred 80000 metric tons of lithium carbonate on.
The lithium hydroxide market is growing it's growing probably more than the lithium carbonate market, even though we have a significant advantage in lithium carbonate. We have been very very successful in order to reduce the cost seemed to be very effective in the production of the diesel electric side. That's why for me 30000 metric ton studies to expand from where I'm moving now we're moving from <unk>.
<unk> from 30000 metric tons is not enough. That's why we're working with our team production team.
Development team now noted to us fastest we can present to the market place to move forward in the lithium hydroxide increased capacity, that's why I'm thinking the first stage will be something close to 60000 on broadly I'm thinking in the long term probably when I go to the 90000 metric tons capacity because of macro technique using Porsche.
Of course, we are using lithium carbonate lithium hydroxide or to how about there you shouldnt on production. These are the things where we're reviewing today, but we want to have the full flexibility to EBITDA considering they had been on 80000 metric tons to have more carbonate or more visa macro exciting to have the choice to be market flexibility on business.
This is the first the second most important new project. We are working now on of course Huntington is just a first stage I want to.
To review, if you dispose of them to move forward towards 200000, or 220000 metric tons about in Chile, that's something we're reviewing now.
Don't expect to have on news about that in the short term, but it's something we're reviewing that would be very important.
The lithium hydroxide facility is gonna be after the lithium.
Carbonate capacity expansion, probably my next though I wouldn't they speak project.
On of course, we are we expect to be very successful in Australia Leap day.
On hold on on as your normal hold on it's a great project.
On the first stage of the Motorola in the 50000 metric tons of capacity.
Theres No reason why stop there.
It goes in the right direction on I'm quite sure. He is going to go in the right direction. We can moving more hold on 200000 metric tons is something that we would have to discuss them to review with our partner from voice Department, but we have a very exciting both of us.
To complete the purchase day took the project in 2000 2040 needs to be at the 50000 on.
Everything goes into rate duration to move forward to something close to the Hunter taught it means we have a little things to do on the lithium on we expect to do it in the <unk>.
Really short periods of time.
The company is quite impressive they the way you are it's important to note that that was obviously the highlight of the quarter.
50% what it on a quarter then also.
And so with this you are moving the company to a new level.
With that.
Gail I guess that makes more sense to invest more in technology and on technology to allow you to be not only the leader, but also to continue to be the low cost of production on them.
I got.
That's exactly what it what do you want to on this time, so how technology may change got proceeds from the cost pools. If you don't want to talk about absolute levels, but maybe relative to I haven't seen the cost growth for both CAD will make that particularly EBITDA upside nowhere, maybe do on how do you need less competitive today also.
Where are we in that process. So we are we at the beginning of a potential improvement in your cost your cost of production on.
They used a lot of things that happen as you are getting escape.
Our framework for that would be really useful.
First it.
First you have to consider the following we are so proud of our technology and capacity on our R&D people. If you consider that at the beginning.
Just on year ago, we had a lot of problems to reach the 70000 metric tons and on other products reached the quality at the beginning of the expansion to 70. So no. We're producing in the same facility more than 7000 metric tons per month, that's different two months of this year. It means the same facility that was designed for 70000 metric.
Total is producing more than 80000 metric tons.
The whole production is food quality is completely commercial quality.
Those two factors are due to the quality of our people that Randy did technology capacity second point and there's a lot of the cameras, we announced because we are still reviewing all our processes improving our process being very effective in our process, we publicly announced that we entered.
No commitment no reported that the government on what it is what's its got a commitment to reduce average.
250% in the long term of the lithium day, Brian its extraction in the Salon and at the same time, increasing our production from 70000, I think those 280000 metric tons means there's a lot of.
Our development in the technology a lot of R&D involving these in these decision third lithium hydroxide, we wait maybe just a little bit more done done on.
Six months to announce on your expansion because we are looking for work for significant improvements in our lithium hydroxide.
Production process, we think that we will announce on expansion from 30 to 60 that will be very very low cost.
We are very proud that the new announcement day, the new 30000 metric tons and meet the increased from 16 to 30000 net we're working now would be based on the original 15 salesman.
We think that we are working very hard on technology on on.
On research and development in order to supply very low cost high quality I took side keep in mind that we're being we're going to be producing in the short term I did on 20000 metric tons per year on our targets to be 100% food, while they do if they have it at 30000 commercial quality if they have it on 20000 metric tons.
Production capacity, that's a lot of R&D a lot of technical.
Technical development behind these goals.
Yeah.
Thank you ever got it or not to proceed.
And the next question will be from sales, our Cortez Novoa BTG.
<unk>. Please go ahead.
Yeah. Good afternoon, congratulations on your fourth quarter report, a well done job considering 'twenty 'twenty unprecedented circumstances. My question to you relates on the prevailing market dynamics, you mentioned that you're currently operating on a monthly run rate of 7000 tons your lithium.
Our plant.
Aiming to exceed.
Over 80000 tons by by.
By 2021, which is a meaningful jump or versus.
Versus 'twenty 'twenty could you please.
Walk us through what segments drive this growth specifically of.
These are massive volume.
On door, if other industries, our drive this growth as well some some breakdown would be greatly.
Appreciate it.
And perhaps as a follow up when integrating the 70000 a carbonate in line into the New 120000 line should we expect some downtime at any level and would you hold any any inventory to cover it.
Any possible shortfall on Tom time Wise Ah when would this just take place. Thank you.
Hi, So first as you know we expect that the D. C here didn't access.
In excess of 2080 thousand metric tons.
We mentioned before we expect our volume sales to be close to 25%, maybe more I don't know, 25% in volume as compared to the previous year. It means that we expect sales to be something higher than 80000 metric tons remains.
Volume sales volumes on sales volume production will be quite similar to 2021, we don't expect that used inventories we have inventory in order to if we need it but keep in mind the work space and we're very close to reach the 120000 metric tons capacity means we don't expect to have a problem and to accomplish our market goes in the medium.
True because we're very close to that had it on <unk> and we're very close today on generate T cells T cells capacity, we have the inventory.
And that's why from the point of view.
Having the capacity to supply the market. We are very proud that we have taken from a logistical information point of view I think we are the track record of the fourth quarter. It's amazing that we were able to sell it in one quarter or two of 6000 metric ton means do we have the capacity at the logistic and a very complex would be.
Take environment commercial logistic production.
Supply everything to selling one product with 6000 metric tons means that we are more than prepared to 100000 metric tons per year in terms of the capacity if theyre going to position to sell his brothers everything quality everything they needed to the customer on so that's why we're we're we're in a very strong position for our sales volume we expect full day.
For this year on the next year and I will ask Philippe to give more color about what you expect for leap evolve, whereas the market growing now on where you are.
Expectation from that.
Okay.
Hello.
Well actually we are very convinced about the fundamentals of the lithium market.
The main driver on the growth that we expect over the next five to 10 year will definitely be the EV market.
Yeah.
We are seeing it today actually in 2020, one we expect.
Sales of electric vehicles to be around 40% higher than in 2020 on our estimation if that day.
The growth of sales of electric cars over the next five years will be in the range of 30% to 32%.
Which is.
Very very strong the growth.
This of course is the main driver, but we are also seeing in the smaller sales.
Very good development in there.
A recent time.
We see that also looking ahead those particular applications, we have a good growth not us.
Probably at the car.
But also a significant.
So this is the main range.
The reasons why we are quite convinced of the of the business of lithium for the future.
Alright fair enough gentlemen, thank you very much.
And the next question will be from Susan <unk> with Bank of America. Please go ahead.
Okay.
Hi, Good morning, everyone. This is actually Isabella.
My question is on on the chemicals business, we did see a big jump on the on volumes, but we saw also a contraction in margins as we could estimate here can you just give us a little bit more color on this business. How do we think about it in 2021 in terms of topline and margins. Thank you.
Okay.
Hi, Isabella you should consider that a what do we call industrial nitrogen today is maybe the most important business the price.
They already have solar salts means they probably use for DS and energy storage systems.
And we have a pre COVID-19 check with our customers from the middle East.
That was the 160000 metric tons during the year 2020, we expect to be very close to 190 sales with pumps with the same customer and at the same price environment for the ERP. This alone is a very old contract. We have with you in the year 2000 on 'twenty. One that's why would we expect to have similar margins to do all these things we have to subsidies.
If there's any change in the cost of production, we're working very hard to improve our yields and so on in order to maintain on to overcome this pressure of the cost that I've already mentioned before.
I think it's reasonable to expect similar margins.
In 2021 as compared to 2020, but keep in mind that volumes will be slightly higher from 160 to 100 to 200 on Nike adjusting the solar salts business and probably a very small increase close to 40000 metric tons, and then normal industrial nitrous business that's y.
In total I think the volumes will be increased close to 34000 metric tons in 2021 as compared to social on 'twenty.
On keeping mind as solar salt is a mix between sodium nitrate and potassium nitrate a specific high quality mix.
Using the solar energy storage process.
Okay. Thank you.
And the next question will be from P. J <unk> with Citigroup. Please go ahead.
Yes, good morning Ricardo.
Last year, you built inventories in lithium and yeah. I think you mentioned earlier that you still have inventories left can you just talk about sort of order of magnitude on inventories and you also mentioned that you have improved your quality of the product with R&D can you talk about how much of your product today lithium is.
Battery grade versus non battery grade. Thank you.
Okay.
Firstly on all our inventories commercial quality. It means we have different clients with different quality requirements and we have inventories for them for their needs and it all my inventory.
More than 95% of inventories fully commercial quality.
That's the first point to be very clear about the second about the total invented even though we don't disclosure. The total budget of the company, we maintain inventories in lithium lithium carbonate close to six months of sales.
Yeah.
Okay. That's helpful.
You know what we are hearing is there is regionalization of supply chain happening in lithium.
Europe is building and so on supply chain Asia, and maybe in the future in the U S. So how much of your product goes to China today, and do you anticipate selling more into Europe in the future.
Okay.
Yes.
Peter maybe I can answer to the question.
I would say that during 2020, we weren't able to.
Net to recover.
Our market share in China.
We feel that we have reached a reasonable level.
Which is more in line with the market.
The total amount of share of China.
Oh.
I don't know if this answers your question.
Yeah do you. So do you anticipate selling more into Europe in the future. Thank you.
As I said before we are very committed to the industry and to support the growth of the industry.
Independently on where these.
The demand will take place so of course, we are considering add on.
Preparing ourselves for scenarios in which you will have more demand of lithium either in Europe or in North America.
So yeah yeah.
No we do not see.
Sure.
A big a big challenge actually due to the Destocking nitrates, we have today, we have already established in Europe, and a very strong network of warehousing same as in the U S.
Remember that we fell more than 9000 tons of life and so we are prepared to handle peak volumes in different markets. So I'm, not particularly concerned about building up their supply chain to Europe on the U S.
Okay. Thank you so much.
Ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Kelly O'brien for any closing remarks.
Thank you for participating in our earnings call. We look forward to have any or join us in the future have a good day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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