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SQM Bets Big With $2.7 Billion Expansion as Lithium Prices Rebound and Demand Surges
Sociedad Química y Minera de Chile (SQM) delivered a solid set of results for the third quarter of 2025, even though earnings came in slightly below what Wall Street expected. The company reported net income of $0.62 per share, just $0.02 short of analyst forecasts.
Revenue for the quarter reached $1.17 billion, supported by strong performance in its lithium business. Record lithium sales volumes played a major role in boosting the company’s top line, showing how quickly demand has improved across global battery markets.
Lithium Momentum Pushes SQM Toward a Strong 2025
- Gross profit climbed 23.1% year-over-year to $345.8 million, marking a strong rebound after a period of weaker prices earlier in the cycle.
Reuters noted that SQM benefited from rising lithium prices as electric vehicle (EV) demand recovered and large-scale battery storage projects expanded around the world. With these trends gaining strength, SQM raised its 2025 global lithium demand growth forecast to more than 20%, up from its earlier estimate of around 17%.
Looking ahead, SQM maintains a positive outlook for the market. The company plans to invest $2.7 billion over the next three years to expand lithium production capacity in Chile. SQM expects lithium prices to stay on an upward trend in the fourth quarter of 2025 as demand from EVs and energy storage systems continues to accelerate.
China’s Bullish Outlook Sparks a Market Rally
While SQM’s results were strong on their own, global sentiment around lithium improved even more after China’s Ganfeng Lithium issued a highly optimistic forecast. According to Bloomberg, Ganfeng Chairman Li Liangbin projected 30% growth in lithium demand next year. His comments immediately triggered a sharp rally in both lithium prices and mining stocks.
The most-active lithium carbonate futures contract on the Guangzhou Futures Exchange jumped 9%, hitting the daily upper limit of 95,200 yuan per ton (around $13,400). Investors reacted quickly, sending shares of major producers higher. SQM’s stock rose as much as 14%, and Albemarle shares climbed about 9.3% during the rally.
This price surge helped strengthen SQM’s quarterly financials. The company reported net income of $178.4 million, a 36% jump from $131.4 million a year earlier.
Revenue climbed 8.9%, rising from $1.08 billion to $1.17 billion over the same period. With growing investor confidence, SQM’s U.S.-listed shares touched $64.60, their highest level in more than two years.
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Lithium Market Shifts Into Recovery
Despite these strong results, the lithium industry is still navigating a market that has gone through significant volatility. Lithium prices cooled sharply after reaching record highs in 2022, as supply growth outpaced demand. This pressured margins for SQM, Albemarle, and other major producers.
However, the second half of 2025 brought a noticeable turnaround. SQM said demand between July and September was stronger than expected.
CEO Ricardo Ramos told analysts that although the market remained volatile, SQM was “cautiously optimistic” about the coming months. He emphasized that fundamentals remain strong because demand is rising not just for electric vehicles but also from energy storage systems, which are becoming essential for renewable power grids.
SQM Sees Sharp Demand Jump Ahead of Codelco Deal
Additionally, the mining giant expects global lithium demand in 2025 to exceed 1.5 million metric tons, representing a 25% jump from 2024. Demand could rise further to 1.7 million metric tons by 2026, according to Pablo Hernandez, vice president of strategy and development for SQM’s Chilean lithium division.
However, even with stronger demand signals, he noted that the company remains conservative when estimating next year’s growth.
The company is also preparing to finalize its long-awaited partnership with state-owned miner Codelco. The joint venture will expand lithium extraction in the Atacama salt flat. With China’s market regulator now approving the deal, the final step is receiving a sign-off from Chile’s comptroller. CEO Ricardo Ramos said he is confident the deal will close before the end of the year.
JP Morgan Raises Long-Term Lithium Price Forecast
JP Morgan raised its long-term outlook for lithium prices as demand stayed strong and mining costs climbed. Earlier this year, the bank cut its long-term spodumene forecast to $1,100 per ton. After reassessing global trends, it now sees that number as too low and has increased its estimate to $1,300 per ton.
Why the Upgrade?
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Stronger Demand: Rapid EV and energy storage growth is expected to keep long-term demand elevated. Rising capital and operating costs also mean new projects need higher prices to advance.
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Market Alignment: Investors already assume long-term prices in the $1,200–$1,300 per ton range. JP Morgan’s new forecast better reflects market sentiment and helps identify trading inflection points.
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Supply Discipline: Australian miners say operations at Bald Hill, Wodgina, and Ngungaju won’t restart until prices exceed $1,200 per ton. JP Morgan sees similar discipline emerging in China, reducing the risk of oversupply.
The bank kept its long-term lithium carbonate and hydroxide assumptions at $15,000 per ton, calling these levels “incentive prices” for downstream investment. In the near term, JP Morgan lifted its 2026–2027 spodumene outlook from $800 per ton to $1,100–$1,200 per ton as it expects a tighter market and potential deficits.
The Bottom Line
SQM is benefiting from a fast-improving lithium market driven by strong EV and battery storage momentum. Rising prices, improved demand, and growing investor enthusiasm are lifting the company’s performance. Although volatility remains, SQM enters 2026 with record volumes, a solid financial foundation, and a clearer long-term strategy supported by disciplined supply and a stronger pricing outlook.
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