SQM Soars 6.5% on Lithium Demand Surge: Is This the Start of a New Bull Run?

Summary
• SQM surges 6.54% to $63.285, hitting intraday high of $64.20
• Lithium prices jump 9% on China’s demand projections from Ganfeng’s chairman
• SQM’s Q3 net profit rises 35.8% to $178.4M, driven by 21.4% revenue growth
• Analysts highlight 32.6 P/E ratio as undervalued amid 35%+ earnings growth forecasts

Sociedad Química y Minera de Chile (SQM) is riding a wave of optimism as lithium demand projections from China’s Ganfeng Lithium Group chairman Li Liangbin spark a 6.54% intraday rally. With lithium carbonate prices surging 9% and SQM’s Q3 earnings beating expectations, the stock’s 63.285 price point reflects a confluence of sector tailwinds and strategic positioning in the EV and energy storage boom.

Lithium Demand Projections Ignite SQM's Rally
SQM’s 6.54% intraday surge is directly tied to Ganfeng Lithium Group chairman Li Liangbin’s forecast of 30%-40% global lithium demand growth by 2026. This projection, coupled with a 9% spike in lithium carbonate futures to 95,200 yuan per ton, has reinvigorated investor sentiment. SQM’s Q3 net profit of $178.4 million—up 35.8% year-on-year—further validates its role as a key beneficiary of this demand surge. Analysts now project SQM’s 2026 earnings to grow 35% to $3.06 per share, outpacing its current 32.6 P/E ratio and suggesting undervaluation.

Lithium Sector Gains Momentum as Demand Projections Drive Optimism
The lithium sector is rallying in lockstep with SQM’s gains, led by Albemarle (ALB) which rose 3.09% on the same demand upgrade. China’s Guangzhou Futures Exchange lithium carbonate surge and global battery-grade consumption projections have created a synchronized upward trend. SQM’s 6.54% move outpaces ALB’s 3.09% gain, reflecting its stronger exposure to Chile’s lithium production and strategic partnerships, such as its pending Codelco collaboration to expand Atacama salt flat extraction.

Options Playbook: Capitalizing on SQM's Volatility with Strategic Calls
• RSI: 79.96 (overbought), MACD: 3.32 (bullish), 200D MA: 40.06 (well below current price)
• Bollinger Bands: Current price at 63.285 exceeds upper band of 58.86, signaling overextension

Trading Setup: SQM’s 63.285 price is trading above its 52W high of 64.20, with RSI near overbought territory and MACD divergence suggesting momentum. Key support at 62.33 (intraday low) and resistance at 64.20 (52W high) define a tight trading range. The 32.6 P/E ratio, below its 33.53 dynamic P/E, suggests valuation discipline amid earnings growth.

Top Options:
• SQM20251219C65 (Call, $65 strike, 12/19 expiry):
- IV: 56.16% (high volatility)
- Leverage: 16.09% (high)
- Delta: 0.516 (moderate sensitivity)
- Theta: -0.1066 (rapid time decay)
- Gamma: 0.0378 (responsive to price swings)
- Turnover: 400 (liquid)
- Payoff at 5% upside (66.45): $1.45 per contract
- Why: High leverage and moderate delta position this call to capitalize on a breakout above 64.20, with IV at 56.16% indicating strong conviction.

• SQM20260116C75 (Call, $75 strike, 1/16/26 expiry):
- IV: 53.63% (moderate)
- Leverage: 29.25% (high)
- Delta: 0.284 (low sensitivity)
- Theta: -0.0510 (slow decay)
- Gamma: 0.0244 (moderate responsiveness)
- Turnover: 58,589 (high liquidity)
- Payoff at 5% upside (66.45): $1.45 per contract
- Why: Long-dated call with high leverage and liquidity, ideal for a bullish thesis on lithium demand growth into 2026.

Action: Aggressive bulls may consider SQM20251219C65 for a short-term breakout play, while SQM20260116C75 offers a longer-term leveraged bet on sustained demand.

Backtest Sociedad Quimica y Minera de Chile Stock Performance
Below is a concise interpretation of the event-study back-test you requested, followed by an interactive visual module that lets you explore all of the detailed metrics.Key take-aways 1. Sample & definition • Universe: Sociedad Química y Minera de Chile (SQM.N) daily data, 3 Jan 2022 – 18 Nov 2025. • Event trigger: any session whose intraday high ≥ prior-close × 1.07 (≥ +7 % intraday surge). • Total events detected: 34.2. Post-event behaviour (close-to-close total return, equal-weighted across events) • Day +1: +0.09 % average vs +0.05 % for SPX (proxy), win-rate 53 %. • Day +5: +0.11 %, win-rate 44 %. • Day +10: +1.28 %, win-rate 50 %. • Peak out-performance around Day +19 (+3.50 % vs +0.52 %), but not statistically significant at the 95 % level given sample size. • There is no clear, robust edge; average gains are modest and fade after ≈ 3 weeks.3. Practical implication • Buying SQM at the close of a ≥ 7 % intraday-surge day and holding up to 1 month has not delivered a statistically reliable excess return over the period studied. • The strategy exhibits roughly coin-flip win rates and shallow average P&L; transaction costs could erase the edge. • Consider tightening the trigger (larger surge) or combining with confirmation filters (e.g., volume spikes, trend filters) before deploying capital.Parameter notes • Holding window (30 trading days) and benchmark (SPX) were set to platform defaults; please let me know if you’d like alternative horizons or benchmarks. • Event detection used the rule high ≥ prior-close × 1.07. • Price series: daily closes (adjusted) from the retrieved dataset.You can review all statistics, cumulative-return curves, and per-event paths in the interactive panel below.Feel free to interact with the module for deeper insights or let me know if you’d like to tweak any parameters (e.g., different surge thresholds, alternative holding periods, or risk filters).

SQM's Rally Gains Traction: Position for a Lithium-Driven Future
SQM’s 6.54% surge is a clear signal of lithium’s reemergence as a strategic asset, driven by China’s demand projections and SQM’s operational resilience. With lithium carbonate prices at multi-month highs and SQM’s Q3 earnings beating expectations, the stock’s 32.6 P/E ratio appears undervalued relative to its 35%+ earnings growth forecasts. Sector leader Albemarle’s 3.09% gain underscores the broader lithium rally. Investors should monitor SQM’s 64.20 52W high as a critical resistance level and consider long-dated calls like SQM20260116C75 to capitalize on the 2026 demand horizon. Act now: Buy SQM20260116C75 for a leveraged play on lithium’s long-term trajectory.