Sociedad Química y Minera de Chile (SQM) announced record lithium sales volumes for Q1 2025 despite plunging prices that have rattled global markets.
The Chilean miner sold 27% more lithium year-over-year, reaching 238,000 metric tons of lithium carbonate equivalent, as electric vehicle demand in China and energy storage projects drove consumption.
Revenue dipped 4.4% to $1.04 billion due to a 64% price drop since 2022, with lithium now trading near $9.20 per kilogram. Net income rebounded to $137.5 million, reversing a $869.5 million loss from Q1 2024 tied to tax adjustments.
SQM’s aggressive production expansion has exacerbated a global lithium glut. The company is advancing projects in Chile’s Atacama Desert to boost annual capacity to 240,000 metric tons of lithium carbonate and 100,000 metric tons of hydroxide.
Its Mount Holland refinery in Australia, set to begin operations by mid-2025, will add 50,000 metric tons of hydroxide output. These expansions align with CEO Ricardo Ramos’s strategy to prioritize volume over margins, betting on long-term demand despite current oversupply.
SQM Bets on Scale Amid Lithium Price Collapse
Lithium prices have collapsed to four-year lows as new mines in Australia, Argentina, and Africa flood the market. SQM expects prices to dip further in Q2 but forecasts stabilization later in 2025.
Rivals like Albemarle and Livent have curtailed production, yet SQM continues investing $1.1 billion in 2025—down from $1.6 billion in 2024—to secure future market share.
Analysts note the company’s output could outpace its 15% sales growth target, deepening the supply-demand imbalance. The iodine segment offset lithium’s volatility, with prices hitting record highs amid constrained global supply.
This diversification highlights SQM’s resilience but underscores reliance on a battery metal facing existential pressures. EV sales growth, while still robust at 17% annually, has cooled from 2024’s 25% surge, raising questions about lithium’s near-term prospects.
SQM’s gamble hinges on a projected supply deficit by the 2030s as green energy transitions accelerate. For now, the lithium market remains a battlefield of volume versus value, with Chile’s mining giant choosing scale—even at the cost of prolonged price pain.