Lithium prices will rise 50% in Q4, says Chile’s SQM

SQM – the world’s second largest lithium miner – expects average lithium prices to rise by close to 50% on the previous quarter in the last three months of 2021, based on rapidly strengthening demand for electric vehicles.

A sharp tightening of the market for lithium, which is the key ingredient in EV batteries, has seen a benchmark index more than double in 2021 and prices in China hit records, benefitting Chile’s major brine producers SQM and Albemarle.

SQM recently reported Q3 net profits of about US$106 million compared to $1.7 million last year, while revenues totalled $661.6 million – a 46% increase from the third quarter of 2020.

“We are already producing at a rate higher than 120,000 metric tonnes per year,” SQM chief executive officer Ricardo Ramos said in a recent statement. He added the firm will continue to work towards its newly set production targets of 180,000 tonnes of lithium carbonate and 30,000 tonnes of lithium hydroxide in Chile by the end of 2022.

Sales volumes this year could get reach a higher than expected 100,000 tonnes, Ramos said. Positive trends in each of the markets in which SQM participates, along with the expiration of the legacy lithium contracts, will likely translate into record-level results in the fourth quarter of this year, he added.

Global lithium demand will quadruple by 2030, reaching 1.8 million tonnes of lithium, according to Chile’s projections. Available supply by then is expected to sit at 1.5 million tonnes.