SQM Shares Surge as Lithium Market Rebounds

The lithium sector is experiencing a powerful resurgence, and Chilean specialty chemicals producer SQM is positioned at the forefront of the competition for dominance in the battery metals market. A surprisingly robust quarterly performance and a dramatic reversal in lithium pricing trends signal a strong return for the industry leader. The critical question for investors is whether SQM can maintain this momentum to revisit its previous peak valuations.

Following two challenging years characterized by declining prices and oversupply, the lithium market is demonstrating renewed vitality. For the first time in approximately two years, average sales prices have increased—a pivotal trend reversal with positive implications for the entire sector. The global demand picture is exploding; SQM projects demand will exceed 1.5 million tonnes for 2025, representing a 25 percent increase over 2024 estimates. This growth is no longer fueled solely by the electric vehicle industry but is increasingly driven by stationary energy storage systems, which are becoming indispensable for stabilizing power grids worldwide.

Quarterly Earnings Shatter Forecasts

The latest financial results depict a heavyweight contender making a formidable comeback. Third-quarter net profit soared to $178.4 million, a substantial 36 percent jump compared to the same period last year. The performance of the core lithium and derivatives business was even more impressive, with revenue climbing 21.4 percent to $603.7 million. This indicates that SQM is benefiting early and significantly from the resurgent demand for the coveted white metal.

In response to the improving market dynamics, SQM has revised its 2025 sales forecast upward, now anticipating sales between 23,000 and 24,000 tonnes of lithium carbonate equivalent.

Should investors sell immediately? Or is it worth buying SQM?

Strategic Positioning and Financial Discipline

As SQM progresses negotiations for its joint venture with the state-owned mining company Codelco—a decision anticipated before year-end—the company is also demonstrating fiscal discipline. Capital expenditure plans for the 2025-2027 period have been reduced from an initial range of $3.1-$3.8 billion down to $2.7 billion, signaling a strategic shift toward prioritizing quality and efficiency over pure volume expansion.

The market is already rewarding this positive trajectory. Following the earnings release, SQM's share price reached a two-year high of $64.60. A striking rally of more than 40 percent within a single month sends a clear message: investors are once again betting on the lithium revival.

With the strategic foundations in place, the focus now shifts to whether SQM can sustain its current course and capitalize on the ongoing global electrification wave, all while navigating a lithium market where competition is intensifying.