Sociedad Quimica y Minera Q1 Earnings Call Highlights

Key Points

• SQM posted a strong Q1 2026 with lithium sales volumes up 25% year over year to about 69,000 metric tons of lithium carbonate equivalent, helped by better pricing across lithium, iodine and nitrates.
• The company raised full-year lithium guidance, now expecting sales volumes to grow about 15% versus 2025, and said second-quarter lithium prices and volumes should be higher than in Q1.
• Management also improved outlooks for specialty plant nutrition and iodine, citing supply shortages from China and rising spot iodine prices, while advancing major growth projects in Chile and Australia.

Sociedad Quimica y Minera NYSE: SQM reported a strong first quarter of 2026, with management citing higher lithium volumes, favorable pricing trends across several businesses and the first full quarter of operations for its Novandino Lithium partnership with Codelco.

Chief Executive Officer Ricardo Ramos said the quarter marked “an important milestone” for SQM and the partnership, which is focused on developing lithium resources in the Salar de Atacama. Ramos said Novandino Lithium generated more than $530 million in contributions to the Chilean state during the quarter through payments to CORFO, taxes and transfers to local governments.

“We are operating at full capacity, delivering strong operational and financial results, while continuing to invest in future growth and production expansion,” Ramos said.

Lithium Volumes Rise as SQM Lifts Annual Guidance

SQM said total lithium sales volumes rose 25% year over year in the first quarter to approximately 69,000 metric tons of lithium carbonate equivalent across its operations. Ramos said the company now expects global lithium demand to exceed 1.9 million metric tons of lithium carbonate equivalent this year, with market conditions indicating a tight supply-demand balance.

Based on that outlook, SQM increased its full-year lithium sales volume guidance and now expects total lithium sales volumes to grow approximately 15% compared with 2025. Management also said average realized lithium prices in the second quarter could be higher than those reported in the first quarter.

During the question-and-answer session, Pablo Hernández, Vice President of Strategy and Development of Novandino Lithium, said SQM’s first-quarter average lithium sales price was roughly $18 per kilogram, up from about $10 per kilogram in the fourth quarter of 2025. He said realized prices remain mainly linked to pricing indexes and added that the company expects second-quarter sales prices to be higher than in the first quarter, though he cautioned that volatility makes it difficult to predict prices beyond the second quarter.

Hernández said the company expects strong lithium sales volumes in the second quarter and aims to surpass the first-quarter 2026 level by more than 10%, which would represent a record for any calendar quarter. He said SQM expects more than 270,000 metric tons of production from the Salar de Atacama this year and sees “significant appetite for lithium units in the market.”

Novandino, Salar Futuro and Australia Projects Advance

In Chile, Ramos said Novandino Lithium delivered solid first-quarter sales volumes and that volumes are expected to increase quarter over quarter. He said SQM continues to advance the Salar Futuro project and expects to begin the environmental permitting process in the coming months.

Asked about capital spending and inflation, Ramos said the company expects to file the environmental study for Salar Futuro in the next few months, probably before the end of the third quarter. He said SQM’s first estimate for total investment is in the range of CLP 3 billion, while acknowledging uncertainty around costs and raw material prices. However, he said inflation should also affect the prices of SQM’s commodities and that the company does not expect the project’s returns or profitability to be affected.

Ramos said SQM expects final approval for the project during 2029 and expects to begin investment in Salar Futuro during 2030.

In Australia, Ramos said Mount Holland and its concentrator are operating at full capacity, while SQM continues to ramp up the Kwinana refinery, which is expected to be fully operational during 2027. Andres Fontannaz, Commercial Vice President of the International Lithium Division, said the company expects to present the Mount Holland expansion for board review and decision in early third-quarter 2026. He said permitting is progressing and that the public review period was scheduled to close at midnight on May 28. Fontannaz said SQM’s share of capital spending considered for 2027 is CLP 200 million.

Plant Nutrition and Iodine Outlook Improves

SQM also raised its guidance for the Specialty Plant Nutrition business, now expecting sales volumes to grow approximately 10% compared with 2025. Ramos said the increase is driven by reduced potassium nitrate exports from China, which have created supply gaps in international markets.

Pablo Altimiras, CEO of the Iodine and Plant Nutrition Division, said China suspended exports of potassium nitrate at the end of March, allowing SQM to enter markets where it does not normally sell. He said the company has the installed capacity, inventories and global supply chain to respond if the market needs additional potassium nitrate.

Altimiras said SQM is optimistic about specialty fertilizer prices, citing the lack of supply from China and higher raw material and related fertilizer costs. He said prices for potassium sulfate have been rising, supporting potassium nitrate pricing, and that SQM believes prices will continue increasing in coming quarters.

In iodine, Ramos said SQM delivered a strong quarter and expects the trend to continue into the second quarter, with spot transaction prices continuing to rise, particularly in Asian markets. The company continues to expect full-year iodine sales volumes to be broadly in line with last year or slightly higher.

Altimiras said first-quarter iodine demand was strong and that SQM believes the market grew more than 3% in the quarter, supporting its view that the market can grow 3% this year. He said the market has changed compared with prior cycles, with X-ray contrast media now playing a larger role. He also said marginal supply projects tend to have higher costs than in the past.

Cash, Dividends and Taxes

Chief Financial Officer Gerardo Illanes said SQM ended the first quarter with higher cash and cash equivalents than at the end of 2025, driven by higher prices for lithium, iodine and nitrates. However, he said the company subsequently paid dividends equal to 50% of last year’s net income and has obligations including CORFO payments, taxes and other payments.

Illanes said SQM has not made a decision on special or interim dividends for the current quarter. He said the company is assessing opportunities, noting that higher lithium volumes and prices will likely mean higher payments to CORFO, the Chilean government and local communities in coming quarters. He also pointed to a high capital expenditure program in Chile, iodine operations and the international lithium division.

On taxes, Illanes said SQM pays Chile’s 27% corporate income tax, along with taxes abroad that average around 30% depending on jurisdiction. He said the company also pays a Chilean mining royalty that ranges from 0% to 14%, depending on profitability. Based on current lithium profitability, he said the royalty is between 11% and 12% on lithium profit, excluding CORFO payments.

Management also said battery energy storage systems now account for about 30% of overall lithium demand, according to Max Vial, Head of Studies of the International Lithium Division.

About Sociedad Quimica y Minera NYSE: SQM

Sociedad Química y Minera de Chile SA NYSE: SQM is a leading global producer of specialty chemicals and minerals headquartered in Santiago, Chile. The company focuses on the extraction and processing of key inputs for the agricultural, industrial and high‐tech sectors. Its core business activities include the mining of lithium, potassium and iodine, as well as the manufacture of value‐added products derived from these raw materials.

SQM's product portfolio spans lithium carbonate and lithium hydroxide used in electric vehicle batteries and energy storage systems; potassium chloride and potassium nitrate fertilizers designed for precision agriculture; and iodine and its derivatives for pharmaceutical, food and electronics applications.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.