Record volumes highlight a turnaround in the battery metals market
Sociedad Quimica y Minera de Chile SA ADR B (NYSE:SQM) issued a bullish assessment of the lithium market, saying global demand should expand by 25% this year. In the company's latest results, SQM reported shipment volumes exceeding 66,000 metric tons in the fourth quarter, marking a 50% rise compared with the same quarter a year earlier.
The company tied the volume recovery to strengthening fundamentals across the electric vehicle (EV) sector and rising deployment of large-scale energy storage systems (ESS). SQM characterized the recent surge in sales as evidence that the industry is working through the oversupply that affected markets in 2024 and 2025.
Production partnership and cost advantage
This earnings update is also the first public report since SQM formalized integration with Chilean state copper company Codelco within its Atacama operations. The pair have created a joint venture, Nova Andino Litio SpA, with explicit targets to raise production by 30% over the coming years.
SQM highlighted that the venture will make use of some of the world’s richest brine deposits, which the company said provides a material cost advantage relative to conventional hard-rock miners, including operations in Australia. That positioning is being presented as a route to capture double-digit growth in global consumption.
The Atacama complex is preparing regulatory submissions related to "direct extraction" methods. SQM said that if regulators approve those techniques, the Atacama operations could increase output further while keeping a lower environmental footprint than many global competitors.
Market dynamics and pricing
SQM noted recent moves in spot pricing: prices have doubled from their June lows, but remain about 70% below 2022 peaks. The company described the market environment as a "disciplined recovery," implying that although prices have rebounded from the nadir, they have not returned to previous highs.
SQM also signaled that the combination of lower-cost brine production and prospective increases in output could compress the industry "cost curve," putting pressure on higher-cost producers that are already under strain.
Implications and next steps
The company’s outlook frames the current phase of the lithium cycle as a recovery driven by EV adoption and energy storage demand, supported by higher shipment volumes and strategic production moves in Chile’s Atacama basin. SQM is moving ahead with regulatory steps for new extraction techniques and plans to expand production under the Nova Andino Litio SpA joint venture with Codelco.