Lithium industry giant Sociedad Quimica y Minera de Chile S.A. Sponsored ADR Pfd Series B(SQM.US) doubled its profits in the first quarter, and significantly raised its sales volume expectations, welcoming a strong start to the year.

One of the world's largest lithium producers, Sociedad Quimica y Minera de Chile S.A. Sponsored ADR Pfd Series B (SQM.US) reported a significant increase in profit for the first quarter and raised its lithium sales forecast, citing strong demand from battery energy storage systems that will keep the market in a tight balance. In the three months ending March 31, the company's adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) was $837 million, more than double the level of the same period last year, and higher than analysts' average expectations. Revenues climbed to $1.76 billion, a 69.8% increase year-on-year, also slightly exceeding expectations. SQM stated that due to operating at "full capacity" to meet demand, lithium sales volume for the quarter reached approximately 69,000 metric tons of lithium carbonate equivalent. The company currently expects lithium sales volume to grow by around 15% this year, higher than the previous forecast of 10% growth. These performances are among the strongest since the peak of the lithium industry boom in 2022. Prior to this, prices experienced a two-year-long crash, leading producers across the industry to cut costs, delay projects, and idle capacity. With tightening global lithium market demand driven by energy storage and electric vehicles, the industry is seeing a revival. SQM is expanding its production, with management emphasizing its strategic focus on maximizing production and maintaining low costs, rather than trying to restrict supply to support prices. CEO Ricardo Ramos stated that with the rapid growth of battery energy storage systems, global lithium demand could exceed 1.9 million tons by 2026. Ramos stated in a press release, "Market dynamics continue to show a tight balance between supply and demand. Positive price trends over the past few months may continue in the short term." The core of SQM's long-term growth plan is the "Future Salt Flats" (Salar Futuro), a new mining method aimed at reducing freshwater consumption at the Atacama Salt Flats and minimizing environmental impact. SQM and Chilean state copper company Codelco are planning to allocate a budget of $3 billion to deploy new mining technologies in their joint venture lithium operations located in the Atacama Desert. The project will gradually replace parts of the traditional evaporation system while retaining some salt flats for potassium fertilizer production and pre-concentration. Freshwater extraction will eventually cease. During Wednesday's conference call, analysts are expected to question management about price trends. Investors will also focus on the company's partnership with state-owned enterprise Codelco, which extends SQM's operating period in the Atacama Desert to 2060. Ramos added, "The first quarter of 2026 was the first complete quarter of operation with Codelco through our joint venture Nova Andino Litio, and the performance highlights the strength of this partnership. We are currently operating at full capacity, achieving strong financial performance while continuously expanding our production capacity. In just the first quarter, Nova Andino Litio contributed over $530 million in revenue to Chile, including payments to CORFO, local governments, and taxes." Ramos stated in the release, "In our SPN business line, we have also raised our sales volume expectations for this year. We now expect total sales volume to increase by about 10% compared to last year, mainly due to tightening supply in Asia. This reflects reduced export supply as Chinese producers prioritize meeting domestic consumption demand and reduce shipments of potassium nitrate, creating opportunities for us to serve previously underserved markets." He further pointed out, "Iodine sales are strong, with prices also rising year on year, and we expect this trend to continue into the next quarter. We maintain our full-year sales volume expectations unchanged, with sales expected to remain flat compared to last year. The seawater pipeline is currently in the testing phase, and we expect it to be operational in the second half of the year."