SQM Completes Merger with Codelco's Lithium Unit
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 28 2026
0mins
Should l Buy SQM?
Source: seekingalpha
- Merger Completion: SQM's merger with Codelco's lithium unit was finalized on Tuesday after the Chilean Supreme Court dismissed an appeal that had delayed the transaction, marking a significant consolidation in the lithium sector.
- Production Control: The merger enables both companies to produce lithium in Chile's Atacama salt flat until 2060, aligning with the Chilean government's strategy to increase state control over the lithium industry and significantly boost production capacity.
- Historic Deal: This transaction is recognized as the largest public-private partnership in Chile's history, allowing Codelco to effectively control lithium production from one of the world's richest salt flats, which is crucial for the global energy transition.
- Enhanced Market Position: The merger positions SQM to strengthen its role in the global lithium market, enhancing Chile's significance in lithium production and supporting the advancement of renewable energy initiatives.
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Analyst Views on SQM
Wall Street analysts forecast SQM stock price to fall
9 Analyst Rating
3 Buy
5 Hold
1 Sell
Hold
Current: 75.630
Low
43.50
Averages
64.28
High
80.00
Current: 75.630
Low
43.50
Averages
64.28
High
80.00
About SQM
Sociedad Quimica y Minera de Chile SA (SQM), is a producer of potassium nitrate and iodine. The Company produces specialty plant nutrients, iodine derivatives, lithium and its derivatives, potassium chloride, potassium sulfate and certain industrial chemicals. Its segments include specialty plant nutrients, industrial chemicals, iodine and derivatives, lithium and derivatives, potassium, and other products and services. Specialty plant nutrients are fertilizers that enable farmers to improve yields. Industrial chemicals have a range of applications in chemical processes, such as the manufacturing of glass and industrial nitrates. Iodine and its derivatives are used in the X-ray contrast media and biocides industries, among others. Lithium and its derivatives are used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity fertilizer that is produced and sold by the Company across the world.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Supply Shortage Risks: Without significant investments, lithium supply deficits could emerge as early as 2028, with existing projects unlikely to maintain market balance beyond the mid-2030s, potentially hindering electrification efforts.
- Investment Demand Analysis: Investment requirements vary across scenarios: $104 billion under delayed transition, $114 billion in the base case, $236 billion under country pledges, and $276 billion in a net-zero scenario, highlighting the substantial funding needs for energy transition.
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See More
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- Net Income Reversal: The company achieved a net income of $588.1 million or $2.06 per share in 2025, a significant turnaround from a net loss of $404.4 million last year, showcasing the success in its lithium business and recovery in market demand.
- Lithium Business Performance: SQM recorded record sales volumes in its lithium segment, with expectations for a 25% growth in the lithium market in 2026, primarily driven by demand from electric vehicles and energy storage systems, indicating the effectiveness of SQM's strategic positioning in this sector.
- Strong Iodine Business: The Iodine and Plant Nutrition division performed robustly, with iodine prices reaching record highs, contributing approximately 42% of total gross profit, demonstrating that SQM's diversified product portfolio effectively supports its profitability in a tight supply and strong demand environment.
See More
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- Demand Surge Forecast: According to Wood Mackenzie's report, global lithium demand is expected to exceed 13 million tons by 2050, more than double the base-case projections, indicating strong market potential amid an accelerated energy transition.
- Supply Shortage Risks: Without significant investments, lithium supply deficits could emerge as early as 2028, with existing projects unlikely to maintain market balance beyond the mid-2030s, potentially hindering electrification efforts.
- Investment Demand Analysis: Investment requirements vary across scenarios: $104 billion under delayed transition, $114 billion in the base case, $236 billion under country pledges, and $276 billion in a net-zero scenario, highlighting the substantial funding needs for energy transition.
- EV Driving Demand: Electric vehicles remain the primary driver of lithium demand growth, accounting for 72% to 80% of total lithium consumption across scenarios, underscoring lithium's irreplaceable role in renewable energy and battery storage.
See More
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Strong Demand in Asia-Pacific: There is a significant demand for lithium in the Asia-Pacific region, particularly in China, as efforts are made to increase lithium volumes.
Focus on Lithium Production: The emphasis is on enhancing lithium production capabilities to meet the growing needs of various industries, especially in the context of electric vehicle batteries.
See More
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Sales Volume Expectations: Lithium sales volumes are projected to increase significantly this year, reaching the highest levels in Q4.
Market Trends: The demand for lithium is expected to rise, driven by various market factors and trends.
See More
SQM Q4 Earnings Report Exceeds Expectations
- Earnings Performance: SQM reported a Q4 GAAP EPS of $0.64, missing expectations by $0.34, indicating pressure on profitability that could affect investor confidence.
- Revenue Growth: Despite the EPS miss, SQM's revenue reached $1.32 billion, a 22.9% year-over-year increase, surpassing market expectations by $40 million, showcasing strong sales performance, particularly amid a lithium market rebound.
- Market Positioning: SQM is well-positioned to lead as lithium prices rebound, especially given escalating geopolitical tensions that may further drive lithium demand, enhancing the company's future profitability.
- Investment Outlook: While current buy recommendations exist, analysts suggest that SQM's real growth potential may be pushed back to 2026, indicating that investors should exercise caution and monitor market developments in the short term.
See More
SQM Reports Significant Revenue and Profit Recovery in 2025
- Revenue Growth: SQM reported total revenues of $4.576 billion for 2025, a 1.0% increase from $4.529 billion in 2024, demonstrating the company's ability to achieve stable revenue growth amid strong market demand, thereby reinforcing its leadership position in the lithium market.
- Profit Reversal: The company achieved a net income of $588.1 million or $2.06 per share in 2025, compared to a net loss of $404.4 million or $1.42 per share in 2024, marking a significant improvement in financial health and boosting investor confidence.
- Lithium Business Performance: SQM experienced record sales volumes in its lithium segment, with expectations for a 25% growth in the lithium market in 2026, primarily driven by demand from electric vehicles and energy storage systems, indicating strong growth potential in the rapidly evolving lithium market.
- Strong Iodine Business: The Iodine and Plant Nutrition division performed well, contributing approximately 42% of total gross profit, with record iodine prices observed by year-end amid tight supply and strong demand, reflecting SQM's diversified product portfolio's ability to generate stable revenue.
See More
SQM Reports Significant Net Income Reversal in 2025 Financials
- Revenue Growth: SQM reported total revenues of $4.576 billion for 2025, reflecting a 1.0% increase from 2024, indicating stable performance in global markets, particularly driven by strong demand for lithium and iodine.
- Net Income Reversal: The company achieved a net income of $588.1 million or $2.06 per share in 2025, a significant turnaround from a net loss of $404.4 million last year, showcasing the success in its lithium business and recovery in market demand.
- Lithium Business Performance: SQM recorded record sales volumes in its lithium segment, with expectations for a 25% growth in the lithium market in 2026, primarily driven by demand from electric vehicles and energy storage systems, indicating the effectiveness of SQM's strategic positioning in this sector.
- Strong Iodine Business: The Iodine and Plant Nutrition division performed robustly, with iodine prices reaching record highs, contributing approximately 42% of total gross profit, demonstrating that SQM's diversified product portfolio effectively supports its profitability in a tight supply and strong demand environment.
See More
