The recovery of associate company SQM’s performance contributed incremental profits; Tianqi Lithium expects net profit for 2025 to turn from loss to profit year-on-year | Caibao Insight

Moreover, the improved performance of its associate company SQM generated significant incremental investment income for the company. Based on Bloomberg’s forecast data, SQM’s full-year results are expected to grow year-on-year, substantially boosting Tianqi Lithium’s equity-method investment income. At the same time, the scale of asset impairment provisions declined sharply compared with the prior year, further supporting profit recovery. Optimized pricing mechanisms significantly improved cost structure The key to Tianqi Lithium’s return to profitability lies in successfully resolving the long-standing misalignment in industry pricing across the value chain. By shortening the pricing cycle for lithium concentrate produced by its subsidiary Talison, the company has better synchronized upstream procurement pricing with downstream lithium compound sales pricing—significantly reducing past profit erosion caused by lagging procurement cost adjustments relative to sales price fluctuations. As newly procured low-cost lithium concentrate enters production and historically high-cost inventory is gradually consumed, the actual raw material costs across all production bases now more closely track current market prices. This adjustment enables the company to maintain relatively stable processing margins even amid falling lithium prices, effectively enhancing the resilience and earnings certainty of its core business during cyclical volatility. SQM investment income becomes a major profit contributor Sociedad Química y Minera de Chile (SQM), a key associate of Tianqi Lithium, is expected to deliver markedly higher investment income in 2025. Based on Bloomberg’s forecasts, Tianqi Lithium estimates that its equity-method investment income for the reporting period will increase substantially year-on-year, driven by SQM’s anticipated earnings growth—making this a critical driver behind Tianqi’s projected turnaround from loss to profit. However, the recognition of this investment income carries some uncertainty. Because SQM, as a dual-listed company in Chile and the U.S., follows its own financial reporting schedule, its official quarterly reports are released after Tianqi Lithium’s current earnings preview. Currently, SQM and its joint venture partners are finalizing the proposed dividend distribution under their agreement and reviewing related accounting implications—a process that may affect SQM’s final net profit.

Analysis report covering over 200 lithium mines worldwide: Brief analysis of seven major lithium mines in South America

Report link: Research and Analysis Report on the Current Status, Trends, and Investment Outlook of the Global and Chinese Lithium Mine Markets 1. SQM: Lithium compound capacity expansion proceeding as planned; partnership agreement with Codelco enters into effect. In 2025, SQM achieved revenue of USD 4.576 billion, up 1.05% year-on-year; net profit reached USD 588 million, an increase of USD 993 million year-on-year. In 2025, SQM sold 233,100 tonnes of lithium compounds (excluding the Kwinana refinery), up 13.71% year-on-year; average selling price stood at USD 9,200 per tonne, down 16.08% year-on-year; revenue from lithium compounds (excluding Kwinana) totaled USD 2.139 billion, down 4.58% year-on-year—primarily due to falling lithium compound prices. Currently, SQM’s lithium chemical plants in Chile possess annual carbonate lithium capacity of 210,000 tonnes and annual hydroxide lithium capacity of 40,000 tonnes. The company aims to expand hydroxide lithium capacity to 100,000 tonnes annually by end-2026 or early 2027, and carbonate lithium capacity to 240,000 tonnes annually by 2028. Additionally, SQM produces lithium compounds in China using sulfate lithium sourced from the Atacama Salt Flat. Its refining plant in Meishan, Sichuan Province, has an annual capacity of 20,000 tonnes—capable of producing either lithium carbonate or lithium hydroxide—and, under toll-processing contracts, added another 30,000 tonnes of lithium carbonate capacity in 2025. 2. ALB (Albemarle): Temporary shutdown of Kemerton processing facility; capital expenditures significantly reduced. Albemarle continues expanding lithium compound capacity. Its Meishan, Sichuan hydroxide lithium plant—commissioned in April 2024—achieved its first commercial sales ahead of schedule in Q2 and ramped up capacity rapidly in Q3. In 2025, the company continued advancing capacity expansions at La Negra, Meishan, Qinzhou (Guangxi), and Kemerton Phase I. Albemarle’s direct lithium extraction (DLE) technology development entered the pilot-testing phase. A DLE pilot plant commenced operations at its La Negra site in Chile. This innovative technology promises to boost lithium recovery rates by 85%, scale up production, and shorten lithium product manufacturing timelines. Operating this pilot plant is a critical step in validating the overall technical feasibility of the approach. In the same year, Albemarle also initiated trials of an alternative DLE technology at its Magnolia facility in Arkansas, USA—utilizing different brine resources and extraction methods—to broaden the applicability of DLE technologies. Testing remained ongoing throughout 2025. According to Albemarle’s financial report, 2025 revenue totaled USD 5.143 billion, down 4.37% year-on-year—mainly attributable to declining market prices for lithium carbonate and lithium hydroxide; Q4 2025 revenue amounted to USD 1.428 billion, up 9.19% quarter-on-quarter and 15.94% year-on-year; H2 2025 revenue reached USD 2.736 billion, up 13.66% quarter-on-quarter and 5.78% year-on-year. In 2025, Albemarle’s lithium compound sales volume, converted to lithium carbonate equivalent, totaled 235,000 tonnes—up 14% year-on-year. Sales volume in 2026 is expected to remain broadly flat versus 2025.

Research Analysts Offer Predictions for SQM FY2027 Earnings

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Scotiabank revised SQM's FY2027 EPS forecast to $7.79 with a $93 target. Analyst consensus remains 'Hold' at $73.58, reflecting mixed views on the lithium miner's outlook.

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