SQM forecasts 25% growth in global lithium demand in 2026 as sales hit record high

SQM expects global lithium demand to grow around 25% in 2026 after reporting record fourth-quarter sales volumes above 66,000 metric tons and stronger momentum from EVs and energy storage.

Chilean lithium giant SQM expects global lithium demand to grow by around 25% in 2026, signaling a stronger market recovery as electric vehicles and large-scale energy storage systems continue to drive consumption. The outlook came alongside the company’s latest earnings report, which showed record fourth-quarter lithium sales volumes of more than 66,000 metric tons.

SQM said its fourth-quarter 2025 performance marked a historic sales high, with volumes rising by more than 50% compared with the same period a year earlier. The company linked the improvement to sustained capacity expansion across its lithium operations and a market environment that is becoming more balanced after a prolonged oversupply cycle.

The company expects demand growth to be supported not only by electric vehicles, but also by the fast-rising use of battery energy storage systems. That segment has become increasingly important for the lithium market, particularly as utilities and grids expand storage capacity to support renewable integration and energy security.

This is SQM’s first earnings release since bringing Chilean state-owned copper producer Codelco into its Atacama operations through the new joint venture Nova Andino Litio SpA. The partnership is central to Chile’s strategy to reinforce its position in the global lithium industry while expanding output at one of the world’s most strategic brine assets.

Nova Andino Litio is designed to capture the next phase of double-digit growth in lithium consumption, with SQM and Codelco targeting roughly a 30% production increase in the coming years at the Atacama complex. The operation produced about 233,000 metric tons of lithium carbonate equivalent in 2025, slightly above guidance, underscoring the scale of its expansion platform.

The expansion could also increase pressure on higher-cost producers, especially as the industry moves out of a multi-year glut that weighed heavily on margins and investment decisions. While lithium spot prices have more than doubled from their June 2025 lows, they remain more than 70% below the peaks reached in 2022, meaning the recovery is still incomplete.

SQM’s latest results also reflected a significant earnings rebound. Reuters reported that the company’s fourth-quarter 2025 net income rose 53% year-over-year to US$183.8 million, while revenue increased 23.3% to US$1.32 billion and gross profit climbed 52.7% to US$448.5 million. For full-year 2025, SQM posted net income of US$588.1 million, compared with a loss in 2024.

One of SQM’s main competitive advantages remains the Atacama salt flat, home to the world’s richest lithium brine deposits. Brine-based production in Chile generally uses less water, chemicals and energy than hard-rock mining routes such as those widely used in Australia, according to Bloomberg’s summary of the company’s positioning.

Looking ahead, Nova Andino is preparing to submit a proposal to regulators to introduce new production technologies, including direct lithium extraction. If approved, these methods could further increase output and improve recovery rates, while strengthening Chile’s long-term competitiveness in a market that is shifting from oversupply toward tighter fundamentals.

For SQM, the message is clear: the lithium market is regaining momentum, and the next leg of growth will be shaped by a combination of EV adoption, accelerating battery storage deployment, and low-cost expansion from top-tier producers.