Sociedad Quimica Y Minera De Chile SA, one of the world's largest lithium producers, reported a significant increase in first-quarter profit and raised its lithium sales forecast, citing expectations that strong demand from battery storage systems will keep the market in a tight balance.
For the three months ended March 31, the company's adjusted earnings before interest, taxes, depreciation, and amortization reached $837 million, more than double the figure from the same period last year and exceeding analysts' average expectations. Revenue climbed to $1.76 billion, a 69.8% year-over-year increase, also slightly surpassing forecasts.
SQM stated that lithium sales for the quarter reached approximately 69,000 metric tons of lithium carbonate equivalent as the company operated at "full capacity" to meet demand. The company now anticipates a roughly 15% increase in lithium sales volume for the year, up from a previous growth forecast of 10%.
These results rank among the strongest since the peak of the lithium boom in 2022, which was followed by a two-year price collapse that forced producers across the industry to cut costs, delay projects, and idle capacity. A recovery is now underway as growing demand from energy storage and electric vehicles tightens the global lithium market.
SQM is expanding production, with management emphasizing that its strategic focus is on maximizing output and maintaining low costs, rather than attempting to restrict supply to support prices. CEO Ricardo Ramos stated that global lithium demand could exceed 1.9 million metric tons by 2026, driven by rapid growth in battery storage systems.
"Market dynamics continue to indicate a tight balance between supply and demand," Ramos said in the earnings release. "The positive price trends observed in recent months are likely to persist in the near term."
Central to SQM's long-term growth plan is the "Salar Futuro" project, a new extraction method designed to reduce freshwater consumption and lower environmental impact at the Atacama Salt Flat. SQM and Chilean state-owned copper company Codelco are planning a $3 billion budget to deploy new extraction technology at their lithium joint venture in the Atacama Desert. The project will gradually replace part of the traditional evaporation system while retaining some salt ponds for potassium fertilizer production and pre-concentration. Freshwater extraction will ultimately be phased out.
On a conference call Wednesday, analysts are expected to press management on price trends. Investors will also focus on the company's joint venture partnership with state-owned Codelco, which extends SQM's operational tenure in Atacama until 2060.
"The first quarter of 2026 marks the first full quarter of operations for our joint venture, Nova Andino Litio, with Codelco, and the results underscore the solidity of this partnership," Ramos added. "We are currently operating at full capacity, delivering strong financial performance while also expanding our production capacity. In the first quarter alone, Nova Andino Litio generated over $530 million in revenue for Chile, including payments to CORFO, local governments, and taxes."
Ramos further noted, "Within our SPN business line, we have also raised our sales volume expectations for this year. We now project total sales volume to increase by approximately 10% compared to last year, primarily due to tightening supply in Asia. This reflects reduced export availability as Chinese producers prioritize domestic consumption and curtail shipments of potassium nitrate, creating opportunities for us to serve previously underserved markets."
He continued, "Iodine sales were strong, with prices also rising year-over-year, and we expect this trend to continue into the next quarter. We maintain our full-year sales volume forecast unchanged, expecting it to be on par with last year. The seawater pipeline is currently in the commissioning phase, and we anticipate it will become operational in the second half of the year."
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