SQM Surges 7.57% on Lithium Frenzy: Is This the Dawn of a New Bull Run?

Summary
• SQM surges 7.21% intraday, hitting 52-week high of $47.36
• Lithium prices spike after CATL halts operations at Jiangxi mine, triggering supply fears
• Options frenzy: 20250815C42.5 call sees 228.42% price change ratio

Sociedad Química y Minera de Chile (SQM) has ignited a firestorm in the lithium sector, surging 7.57% intraday on August 11, 2025. The stock’s 52-week high of $47.36 and 23.5x dynamic P/E ratio signal a re-rating of strategic resources. With CATL’s Jiangxi mine closure sparking a 3% jump in lithium carbonate prices and a 12% rally in SQM shares, traders are scrambling to position for a potential supply-driven rebound. The lithium sector’s synchronized 15% average intraday move underscores the urgency of this moment.

CATL Mine Closure Sparks Lithium Price Surge and SQM Rally
The abrupt shutdown of Contemporary Amperex Technology Co. Ltd.’s (CATL) Jiangxi mine, a facility accounting for 6% of global lithium output, has triggered a 3% jump in spot lithium carbonate prices to 75,500 yuan/ton. This disruption, coupled with anti-involution policies in China targeting overcapacity, has created a supply-side shock. SQM, as a key player in the lithium supply chain, benefits directly from tighter supply dynamics, with its Chilean operations positioned to capitalize on reduced global output. Analysts at Macquarie Capital note that while CATL claims minimal operational impact, the broader sector’s oversupply concerns are being recalibrated in real time.

Lithium Sector Unites as Supply Fears Drive Broad Rally
The lithium sector is rallying in unison, with Albemarle (ALB) surging 7.28% and Tianqi Lithium (002460.SZ) jumping 19% in Hong Kong. SQM’s 7.21% gain aligns with the sector’s 15% average intraday move, reflecting shared exposure to supply-side shocks. While SQM’s 23.5x dynamic P/E is slightly above the sector’s 21x average, its 52-week high of $47.36 suggests strong conviction in its long-term lithium dominance. The sector’s synchronized move underscores the interconnectedness of global lithium producers, with CATL’s actions acting as a catalyst for a broader re-rating of strategic resources.

Options Frenzy: High-Leverage Calls Lead the Charge
• MACD: 0.568 (bullish divergence), Signal Line: 0.586, Histogram: -0.018 (flattening)
• RSI: 59.3 (neutral), Bollinger Bands: 42.44 (upper), 38.415 (middle), 34.39 (lower)
• 200D MA: 37.61 (below current price), 30D MA: 37.92

SQM’s 16.5% premium to its 200-day moving average and RSI near neutral suggest bullish momentum. Two options stand out for aggressive positioning:

• 20250815C42.5 (Call, $42.5 strike, 8/15 expiry):
- IV: 53.60% (moderate)
- Leverage Ratio: 14.55% (high)
- Delta: 0.862 (deep in-the-money)
- Theta: -0.370 (rapid time decay)
- Gamma: 0.077 (moderate sensitivity)
- Turnover: $503,340 (high liquidity)
- Payoff at 5% upside ($47.528): $5.028/share
This contract offers high leverage and liquidity, ideal for capturing SQM’s near-term volatility.

• 20250919C45 (Call, $45 strike, 9/19 expiry):
- IV: 43.00% (moderate)
- Leverage Ratio: 10.48% (high)
- Delta: 0.714 (moderate)
- Theta: -0.057 (slow time decay)
- Gamma: 0.053 (moderate sensitivity)
- Turnover: $12,205 (reasonable liquidity)
- Payoff at 5% upside ($47.528): $2.528/share
This contract balances leverage with time decay, offering a longer runway for SQM’s rally to play out.

Aggressive bulls should consider 20250815C42.5 for immediate upside capture, while 20250919C45 provides a measured approach. If $47.36 holds, the 200-day MA at $37.61 becomes a critical support level.

Backtest Sociedad Quimica y Minera de Chile Stock Performance
Sociedad Quimica y Minera S.A. (NYSE: SQM) experienced a notable intraday surge of 8% on August 11, 2025. To assess the stock's performance following this event, we can consider the following points:1. Post-Surge Performance: The 8% intraday surge in SQM's stock price on August 11, 2025, represents a significant positive movement. To evaluate the stock's performance after this surge, we would look at its trading activity, investor sentiment, and any subsequent news or events that may have influenced the stock's trajectory.2. Investor Sentiment and Trading Activity: On August 11, 2025, SQM saw a notable increase in trading volume, indicating heightened investor interest and activity. This could be due to a variety of factors, including the surge itself, which might have attracted attention from both bullish and bearish investors.3. Market Reaction and News: It's important to consider any relevant news or events that may have contributed to the surge. For instance, if the increase was triggered by positive earnings reports, favorable market conditions, or specific company developments, the stock's performance in the aftermath would likely depend on whether these factors continued to support the stock price.4. Subsequent Performance: To fully assess SQM's performance after the surge, one would need to examine the stock's trading activity and price movements over the following days and weeks. This would provide a clearer picture of how the stock responded to the initial surge and whether it was able to sustain the gains.In conclusion, while an 8% intraday surge is a significant development for SQM, it is only part of the larger picture of the stock's performance. Further analysis of the stock's trading activity, investor sentiment, and any relevant news or events following the surge is necessary to fully evaluate its performance in the aftermath of this event.

Bullish Momentum Intact—Position for SQM's Next Move
SQM’s 7.21% surge is a textbook reaction to a supply-side shock, with technicals and fundamentals aligning for a sustained rally. The stock’s 52-week high of $47.36 and 23.5x P/E suggest undervaluation relative to its strategic lithium assets. Sector leader Albemarle (ALB) surging 7.28% reinforces the sector’s strength. Traders should monitor the 200-day MA at $37.61 as a key support level and watch for follow-through volume in the 20250815C42.5 call. With CATL’s mine closure sparking broader anti-involution policies, the lithium sector is poised for a re-rating—position now for SQM’s next move.