Lithium prices have bottomed out: global demand will surge by 25%, and the electric vehicle market is about to recover

LootboxPhobia · 2026-02-28T07:28:25+00:00

Global lithium producer SQM forecasts a 25% increase in battery metal demand, with sales soaring 50% year-over-year, primarily driven by electric vehicles and energy storage systems. SQM is collaborating with Codelco to boost production using low-cost, environmentally friendly extraction technologies, which are expected to put pressure on high-cost competitors. The market is experiencing an orderly recovery.

LootboxPhobia

2026-02-28 07:28:25

Abstract generation in progress

Record-breaking Sales Signal Recovery in Battery Metals Sector

Global leading lithium producer Sociedad Quimica y Minera de Chile SA ADR B (NYSE: SQM) has issued an optimistic outlook for the battery metals market. The company expects global demand to grow by 25% this year, a significant signal for the energy transition sector.

This forecast comes alongside strong financial results, showing that the company’s Q4 sales exceeded 66,000 metric tons. Compared to the same period last year, this represents a 50% increase.

The surge in sales indicates that the industry is successfully addressing the oversupply issues that have troubled the market in 2024 and 2025. SQM believes that the main drivers of this growth are the expansion of the electric vehicle (EV) market and large-scale energy storage systems (ESS).

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Collaboration with Codelco to Pressure High-Cost Competitors

This is the first financial report released after SQM integrated Chilean state-owned copper giant Codelco into its Atacama operations. Their new joint venture, Nova Andino Litio SpA, plans to increase production by 30% over the next few years.

By leveraging the world’s richest salt lake deposits, this joint venture enjoys significant cost advantages over traditional hard-rock mining operations (such as those in Australia). This positioning aims to capitalize on the double-digit growth opportunities in global consumption.

The Atacama complex is currently preparing to submit regulatory proposals for “direct extraction” technology. If approved, these new methods could further boost production while maintaining a lower environmental footprint than global competitors.

This move is expected to tighten the “cost curve,” potentially squeezing high-cost producers already in trouble. Although spot prices have doubled from June lows, they are still 70% below the 2022 peak, keeping the market in an “orderly recovery” state.

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