SQM Q1 revenue rose 70% as lithium price doubled; Tianqi cut its stake while the Codelco JV paid $530M to the Chilean state

Summary

SQM reported Q1 2026 revenues of approximately $1.76 billion, up 69.8% year on year, as the lithium price recovery from its 2025 trough lifted the average realised price for lithium carbonate and derivatives to approximately $18/kg, compared with $10/kg in Q4 2025 and $53/kg at the 2022 peak. SQM's Atacama operations sold approximately 69,000 tonnes of lithium carbonate equivalent (LCE) in Q1 2026, and the company upgraded full-year 2026 volume guidance to at least 15% growth over 2025. Under the Codelco-SQM JV structure established in 2023, which grants Codelco operational control of the Atacama brine deposit from 2030, the Q1 2026 distribution to the Chilean state (via CORFO and Codelco) reached $530 million, the first major payoff under the new revenue-sharing regime. In February 2026, Tianqi Lithium sold a 1.25% stake in SQM on the open market, reducing its holding to approximately 21.35%, citing liquidity requirements; the sale was within thresholds permitted under the JV governance structure.

The split

SQM and sell-side analysts frame the Q1 earnings as confirmation that the 2024-2025 oversupply trough was a cyclical, not structural, event: the rapid price recovery from $10/kg to $18/kg in a single quarter, driven by the demand surge documented in the lithium deficit story, validates SQM's decision not to idle Atacama capacity during the downturn. Chilean government commentary (Mining Ministry, CORFO) emphasises the $530M state distribution as the model outcome of the 2023 JV renegotiation, which increased state capture of lithium rents relative to the prior flat-royalty structure. Critical perspective comes from Chilean civil society and some academic economists who argue that a $1.76B revenue quarter returning $530M to the state still leaves more than two-thirds of the resource rent with SQM, and that the 2030 Codelco transition creates a decade of continued private-sector windfall before national operational control is established. Tianqi's stake reduction is read differently by different observers: bulls see a non-strategic liquidity move; bears flag that Tianqi, which bought into SQM in 2018 at a premium to establish Chinese influence over Chilean lithium supply, may be reevaluating the strategic rationale of that stake as China develops domestic lithium assets in Qinghai and Xinjiang.

By the numbers

• $1.76B, SQM Q1 2026 total revenues (up 69.8% year on year).
• 69,000t LCE, SQM Q1 2026 lithium volumes sold.
• $18/kg, SQM average realised lithium price in Q1 2026.
• $10/kg, SQM average realised lithium price in Q4 2025.
• 15%+, SQM's upgraded 2026 full-year volume growth guidance.
• $530M, Codelco-SQM JV distribution to the Chilean state in Q1 2026.
• 1.25%, Tianqi's stake reduction in SQM in February 2026 (holding reduced to ~21.35%).
• 300,000 tpa LCE, SQM's stated 2030 production target.

Why it matters

SQM is the world's second-largest lithium producer by volume and the dominant player in the Salar de Atacama, which holds the highest-grade lithium brine resource globally. Its Q1 2026 results set the price and volume benchmark against which all other lithium producers and battery supply chains are calibrated. The $530M state distribution demonstrates that the 2023 JV renegotiation model, which critics dismissed as a symbolic compromise, is generating material revenue for Chile. The Tianqi stake reduction reintroduces a question that has been dormant since 2023: whether Chinese strategic equity in SQM, which Beijing viewed as a hedge against Chilean production being directed to Western supply chains, remains an active policy priority for Beijing or is being quietly unwound. The 15%+ volume guidance, if met, implies SQM pushing Atacama extraction toward CORFO's permitted cap, which will test the environmental monitoring framework governing brine extraction in one of the world's driest ecosystems.

What to watch

• Q2 2026 SQM earnings: whether the $18/kg price holds or corrects as DLE supply from Argentina ramps.
• CORFO's Atacama extraction quota review for 2027: whether the 15%+ volume target is permitted under environmental limits.
• Tianqi's remaining ~21.35% SQM stake: further sales, disposition to Codelco, or continuation.
• The Codelco operational transition plan for 2030: what Codelco's management structure for Atacama will look like and whether it will partner with non-Chinese investors.
• Chilean lithium royalty rate debate: whether the government moves to increase rates above the 2023 framework, given Q1's $530M distribution leaves significant rent with SQM.