SQM posts surge in quarterly profit as lithium market tightens

Chilean lithium producer SQM posted on Tuesday a jump in first-quarter profit and revenue, helped by higher prices and stronger sales volumes on robust demand for electric vehicle batteries and energy storage.

The world’s second-largest lithium producer, said net income more than doubled to $365 million in the quarter from January to March quarter, but missed an estimate of $426 million from analysts polled by LSEG.

Revenue climbed 70% to $1.76 billion, beating analysts’ forecast of $1.62 billion, while adjusted EBITDA more than doubled to $837 million, also topping the LSEG estimate of $787 million.

SQM said revenue from the lithium and derivatives business, its largest unit, surged to $1.19 billion, driven by a rebound in prices and a 25% increase in sales volumes.

Chief executive Ricardo Ramos said the company sold about 69,000 metric tons of lithium carbonate equivalent (LCE) during the quarter as it ran at full capacity to satisfy strong customer demand.

SQM said its average realized lithium price rose about 95% from a year earlier to roughly $17.8 a kg, reflecting a tight market turnaround after a slump from record highs in 2022.

Prices for the battery metal came under pressure as supply growth outpaced demand, hurting margins for global producers including SQM and US-based rival Albemarle.

But demand has recently been supported by rapid growth in battery energy storage systems, alongside continued electric vehicle adoption.

Reflecting that improvement, SQM said it now expects its total lithium sales volumes to grow about 15% in 2026, up from a previous forecast of 10%, and estimated global lithium demand could exceed 1.9 million metric tons of LCE this year.

SQM also highlighted progress in its partnership with Chilean state miner Codelco, through their Nova Andino Litio venture, which aims to expand lithium production in the Atacama salt flats.

Ramos said the partners were finalizing documentation to begin environmental permitting for the Salar Futuro project in the coming months.

SQM, one of only two companies producing lithium in Chile, also makes specialty plant nutrients, iodine and industrial chemicals.

(By Kylie Madry; Editing by Daina Beth Solomon and Clarence Fernandez)