Market recovery signals? Lithium industry giant Chilean mining and chemical company (SQM.US): Global demand is expected to grow by 25% this year

Bloomberg News has learned that one of the world’s largest lithium producers, Chilean Mining and Chemical (SQM.US), stated that after the industry gradually emerges from a global oversupply, worldwide demand for this battery metal is expected to grow by about 25% this year. The company’s latest quarterly sales, which hit a record high, seem to support this view. This company, which operates the world’s richest lithium brine lakes, said in its financial report that sales in the fourth quarter of last year rose to over 66,000 tons, an increase of more than 50% compared to the same period last year. The company stated that the growth in lithium demand will mainly be driven by electric vehicles and energy storage systems.

This is the first financial report released by Chilean Mining and Chemical since it partnered with Codelco, Chile’s state-owned copper giant, for the Atacama project. The two parties plan to increase the output of this large integrated project by about 30% in the coming years. The Atacama project uses evaporation extraction technology, which consumes less water, chemicals, and energy compared to the hard-rock mining methods commonly used in Australia, the world’s largest producer.

The joint venture NovAndino is preparing to submit plans to regulators to introduce new technologies, including direct extraction, which could further boost production. NovAndino aims to capitalize on the double-digit growth in global lithium consumption—driven by increased demand for large-scale battery storage and electric vehicles. As the industry gradually moves out of a long-term oversupply and price pressure phase, this expansion could put pressure on higher-cost competitors.

Meanwhile, the global major lithium producer Zimbabwe has suspended lithium concentrate exports, raising concerns that the global supply of this battery metal may tighten, potentially supporting lithium prices. However, it should be noted that although spot prices for lithium have more than doubled from their June lows last year, they are still over 70% below their peak in 2022.

According to Zimbabwe’s Ministry of Mines, the country has fully banned lithium concentrate exports starting this Wednesday. Mining Minister Polite Kambamura said the move aims to promote domestic processing industries and crack down on illegal ore exports. He emphasized that the ban will last until mining companies fully comply with government regulations. According to the U.S. Geological Survey, this African country contributed about 10% of global lithium ore production last year. Commodity consulting firm CRU Group analyst Cameron Hughes pointed out, “The continued rise in lithium prices and rampant illegal export activities are likely key factors driving this policy adjustment.”