A higher lithium price, combined with SQM’s strong financial position, could increase the fiscal revenue the government obtains from the production of the metal this year.
In the first quarter, lithium prices accumulated an 84% increase. By the end of April, lithium carbonate prices in China reached their highest level in more than two years.
The metal’s value has shown stronger performance in recent months due to tighter supply caused by mine shutdowns in China and driven by increased demand for energy storage systems—namely batteries, which are essential for managing the variable nature of solar and wind energy—according to Cochilco in its latest price report.
“Expectations are definitely bullish,” says Andrés González, head of Mining Industry Analysis at consulting firm Plusmining.
“According to the average projections of several analysts and investment banks, the average price is expected to reach US$ 17,300 per ton in 2026 and US$ 18,300 per ton in 2027, which represents an increase of more than 80% from around US$ 9,500 in 2025,” he notes.
Revenue for this year
Higher lithium prices would also lead to greater fiscal revenues. “Considering only the tiered lease payments that Corfo agreed upon with SQM and Albemarle, approximately US$ 2,800 would be collected per ton sold at spot price. Based on annual production of around 300,000 tons of LCE, this would amount to approximately US$ 840 million in additional revenue. Added to this would be higher income tax and mining royalty revenues. However, the main limiting factor associated with higher prices would come from the rent received by Corfo,” González explains.
Last year, Corfo received less than US$ 400 million from lease payments. The revenue collected was well below the US$ 737 million the government had expected to receive from lithium, leading the Ministry of Finance to request that the agency sell part of its assets—mainly bank bonds—to cover the shortfall, as reported by El Mercurio in February.
SQM’s stronger position
In a context of higher prices, SQM would be in a stronger position than its other competitor in Chile, Albemarle, to take advantage of the increase. Although the company producing lithium in the Atacama salt flat is NovaAndina Litio—where Codelco holds a 50% stake plus one share, and SQM owns the remaining percentage—investors seeking exposure to the market must do so through SQM, which is the publicly traded company.
“SQM entered 2026 from a considerably stronger operating position than Albemarle, which is reflected in its 29.6% margin, more than double the 13.1% reported by its U.S. competitor. The Chilean company remained profitable throughout the downturn cycle, while its U.S. counterpart had to absorb losses and restructure operations,” explains XTB market analyst Emanuelle Santos.
“SQM has historically been the lithium producer with the greatest exposure to spot market prices. This has been a well-executed strategy and likely benefits them more than competitors during periods of rising prices. In addition, it has the advantage of producing in the Atacama salt flat, which ranks among the world’s most cost-efficient projects, partially offset by taxes and distribution costs,” says Aldo Morales, Deputy Manager of Equity Research at BICE Inversiones.
Source: El Mercurio