Lithium manufacturer SQM anticipates worldwide demand to increase by 25% in the current year

SQM and Codelco's Nova Andino Litio Surpass Lithium Production Goals

The Nova Andino Litio SpA partnership, formed by Sociedad Química y Minera de Chile (SQM) and Codelco, achieved a lithium carbonate equivalent output of 233,000 metric tons in 2025, outperforming their initial targets. This figure represents a notable increase from 2024 and played a significant role in stabilizing the lithium market following a period of global oversupply. Looking ahead, the joint venture is targeting a 30% production boost by 2030, aiming to reach 300,000 tons before the decade concludes.

Financial Performance and Operational Highlights

For the year ending December 31, 2025, SQM reported a net profit of US$588.1 million, a dramatic turnaround from the previous year's loss of US$404.4 million. This improvement was attributed to record-breaking lithium sales, robust iodine prices, and key operational achievements, including the inaugural shipment of lithium hydroxide from the Kwinana facility. In the fourth quarter alone, gross profit soared to US$448.5 million, marking a 52.7% rise compared to the same period in 2024.

Zimbabwe Halts Lithium Exports, Shaking Global Markets

On February 25, 2026, Zimbabwe's government announced an immediate suspension of lithium concentrate and raw mineral exports, emphasizing the importance of domestic processing. This policy shift had an instant effect on global markets, with spot prices for lithium carbonate in China jumping by 6% to 7%. Zimbabwe's decision aligns with similar actions by other African countries, all seeking to maximize local economic gains from their mineral resources.

Key Drivers Behind the Developments

The surge in SQM's production and the positive market outlook are largely fueled by escalating demand from the energy storage and electric vehicle sectors. In November 2025, SQM noted early indications of a more balanced supply-demand dynamic, as demand began to outstrip supply projections. The company is also broadening its activities at the Salar de Atacama and expanding its refining capabilities in China through tolling partnerships.

• In Australia, SQM is operating at full capacity for spodumene concentrate production.
• The company recently completed its first shipment of lithium hydroxide from the Kwinana refinery, a product certified to have a 37% lower emissions profile compared to conventional hard-rock methods.

Market Reactions to Policy Changes

Zimbabwe's export restrictions have led to a tightening of global lithium supplies, causing prices in China to spike to 160,000-162,000 yuan per tonne, up from 150,000-152,000 yuan just the day before. This sharp increase highlights the growing scarcity of lithium and its critical role in powering batteries for electric vehicles and energy storage systems.

SQM's share price climbed 4.41% to $80.10 following the news, with other producers such as Albemarle and Sigma Lithium also experiencing gains. Investors are now eagerly awaiting SQM's upcoming earnings release on February 26 for further insights into market trends and pricing.

Analyst Focus: Efficiency, Sustainability, and Policy Impact

SQM is working to improve efficiency at the Atacama salt flat by adopting direct extraction technologies, pending regulatory approval. These innovations are intended to increase production while reducing environmental impact. The company is also enhancing oversight at the El Teniente copper mine after a fatal incident in July 2025.

Market analysts are closely monitoring the consequences of Zimbabwe's export ban. Should the policy remain in place, it may drive lithium prices even higher and further restrict supply for refiners and battery manufacturers. Additionally, this move could inspire other nations to adopt similar measures, potentially reshaping the global lithium supply landscape.