SQM, the world's second-largest lithium company, expects lithium prices to rise by 50% month-on-month in the fourth quarter.

SQM, the world's second-largest lithium miner, expects the average price of lithium to rise nearly 50 per cent in the last three months of this year compared with the previous quarter as lithium supplies remain tight due to the ferocious electrification of cars.

SQM is the beneficiary of the current tight supply and demand of lithium. The company reported net profit of about $106 million in the third quarter of this year, compared with $1.7 million in the same period last year, and revenues of $661.6 million, up 46 per cent from the third quarter of 2020.

As the lithium market continues to be tight, global lithium prices have more than doubled in 2021, and lithium prices in China have also hit an all-time high. With little or no lithium stocks in the current global supply system, and demand for lithium will more than triple by 2025, buyers are snapping up as much lithium as possible.

SQM and (Albemarle), the world's largest lithium company, have accelerated their expansion plans this year and have been evaluating new opportunities.

SQM CEO Ricardo Ramos (Ricardo Ramos) said in a statement that the company's annual production has exceeded 120000 tons. The company will continue its efforts to achieve its new target of producing 180000 tons of lithium carbonate and 30, 000 tons of lithium hydroxide in Chile by the end of 2022.

SQM said the surge in profits was not entirely driven by lithium, and sales of its iodine, specialty crop fertilizers and potassium lines also soared over the same period.

Mr Ramos said lithium sales this year could be close to 100000 tonnes, higher than previously expected. He expects record performance in the lithium business in the fourth quarter of this year.

Chile is currently the world's largest producer of copper, but it was the world's largest producer of lithium until 2018, before it lost its lead position to Australia.

To avoid further loss of market share (China is expected to become the world's second-largest lithium producer by 2030), Chile announced a tender for the upcoming exploration and production of 400000 tons of lithium in October.

Chilean ambition

Chile currently produces about 29% of the world's lithium, but plans to double its production to 250000 tons of lithium carbonate equivalent (LCE) by 2025.

According to Chile's forecast, global demand for lithium will quadruple to 1.8 million tons by 2030. At that time, the available supply in the market is expected to reach 1.5 million tons.

The Atacama region of Chile supplies nearly 1/4 of the world's lithium. In recent years, however, automakers, indigenous communities and activists have paid increasing attention to the environmental impact of lithium production on arid areas, one of the driest deserts in the world.