London, August 19th (Argus) - After achieving a record lithium sales volume in the second quarter, Chilean lithium producer SQM has raised its global lithium demand forecast for this year to over 21 million tons of lithium carbonate equivalent (LCE).
SQM's lithium sales volume in the second quarter increased by 59% year-on-year, reaching the highest level of 84,100 tons LCE, once again indicating that the growth rate of lithium demand has exceeded the expectations of many people at the beginning of the year.
The sales revenue of SQM's lithium battery business during the period from April to June increased from 445 million US dollars in the same period last year to 1.78 billion US dollars, and the average lithium price sold rose by nearly 23% compared to the first quarter. Net income also increased from 88 million US dollars in the same period last year to 660 million US dollars.
SQM stated that this growth was mainly driven by the demand for lithium in energy storage systems (BESS), which offset the impact of the previous slowdown in the battery power market. The company currently expects that global lithium demand this year will exceed 21 million tons LCE.
SQM predicts that in 2026, energy storage systems will account for 30% of global lithium demand, compared to 26% last year, based on a market of 1.9 million tons LCE.
Supply growth is also continuing
SQM believes that although market demand is rising, the market does not face an increasingly widening supply-demand gap, as it and other producers continue to have approved expansion projects, and it is expected to add a large amount of supply within this decade.
SQM stated last month that its Novandino project, jointly established with Chile's state-owned copper company Codelco, has submitted the environmental and technical documents for the Salar Futuro project worth 3 billion US dollars. The project aims to increase lithium production and achieve no continental water consumption in the Atacama salt lake mine. Currently, the project is still awaiting regulatory approval, and the construction period is expected to be about seven years.
The Australian joint venture Covalent Lithium has approved the expansion of its Mount Holland mine in July. This project will increase the company's lithium oxide concentrate production to 760,000 tons per year by 2030, a doubling growth.
Whether the optimistic expectations can be maintained in the next ten years, SQM stated that it depends not only on the battery demand itself, but also on the progress of projects such as Salar Futuro and Holland.
