Shares of Chilean lithium manufacturer SQM jumped more than 3% during Tuesday trading in Santiago following renewed support from financial analysts at Scotiabank.
The banking institution said recent discussions with company leadership strengthened their confidence in robust lithium demand expansion and highlighted SQM’s competitive cost structure at Chile’s Salar de Atacama facility.
Following discussions with SQM Chief Financial Officer Gerardo Illanes and Head of Investor Relations Isabel Bendeck, Scotiabank kept its “Sector Outperform” rating and $105 price target unchanged, naming SQM among its preferred investments for 2026.
According to the analyst report, SQM anticipates lithium incentive pricing around $18 per kilogram, falling within a broader $15-to-$20 range, and projects demand will continue growing substantially through 2030, necessitating additional supply from new market participants.
The analysis revealed SQM’s comprehensive lithium production costs, not including payments to state development agency Corfo, stand at approximately $4,500 per metric ton, maintaining its status among the sector’s most cost-effective producers.
Scotiabank reported that SQM plans to make a decision in the upcoming months regarding potential expansion of the Mt. Holland project in Australia, which could increase capacity to 100,000 metric tons, with SQM holding rights to half that amount.
The bank noted SQM identified attractive financial prospects in battery energy storage systems, or BESS, where the company believes lithium demand growth is becoming more influenced by cost advantages than consumer preferences.
According to Scotiabank, SQM acknowledges it cannot sustain its current market position permanently, with company officials stating that industry expansion is occurring too quickly for any individual producer to maintain pace.
SQM identified environmental permitting as the primary bottleneck limiting new lithium supply development.
