Chilean lithium producer SQM has lifted its full-year sales growth forecast after a strong first-quarter performance, while simultaneously committing USD 3 billion with state-owned copper giant Codelco for a major lithium extraction venture in Chile’s Atacama Desert.
The move comes as global lithium demand continues to outpace supply, with the company’s CEO flagging potential market tightness ahead. The SQM share price ended 4.36% higher on the report, up 167% in the past 12 months.
The Print
SQM reported first-quarter adjusted EBITDA of USD 837 million, more than double the year-ago result, on revenues that climbed nearly 70 per cent year-on-year to USD 1.76 billion. Both figures exceeded consensus expectations.
Sales volumes reached approximately 69,000 metric tons of lithium carbonate equivalent during the quarter, with the company operating at full capacity to meet demand. Following the results, SQM raised its FY26 lithium sales volume growth forecast from 10 per cent to 15 per cent.
Chief executive Ricardo Ramos said global lithium demand could exceed 1.9 million metric tons of lithium carbonate equivalent in 2026, pointing to continued tightness in the supply-demand balance. Separately, SQM and Codelco announced they are budgeting USD 3 billion to deploy new extraction technologies at their joint lithium venture in the Atacama Desert, one of the world’s most productive lithium regions.
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SQM’s decision to operate at full capacity and increase its volume outlook suggests the company sees sustained demand from electric vehicle manufacturers and battery makers, particularly as Western automakers push deeper into EV production.
The USD 3 billion investment with Codelco underscores the strategic importance of Chile’s lithium reserves. The Atacama Desert holds some of the highest-grade lithium brine deposits globally, and the joint venture aims to extend production using more efficient extraction methods.
For Australian investors, the development is relevant as a signal of global lithium supply dynamics. While SQM is not listed on the ASX, its production decisions and capacity expansions influence the broader commodity price environment that affects Australian lithium producers and resource-focused portfolios.
Lithium Strength
Lithium prices fell sharply through much of 2025 after a prolonged rally, pressuring producers globally. The correction was driven by a combination of new supply coming online and softer-than-expected demand growth in China, the world’s largest EV market.
However, sentiment has shifted in recent quarters as inventories normalised and demand picked up again. SQM’s Q1 results and forward guidance suggest the market may be entering a tighter phase, particularly if production growth fails to keep pace with rising EV adoption.
Chile remains one of the world’s top three lithium producers alongside Australia and China. The country’s government has taken a more active role in regulating lithium extraction, with Codelco’s involvement in the SQM venture part of a broader strategy to retain greater state control over lithium resources.
