By Kylie Madry
June 9 (Reuters) - Preferential shares of Chilean lithium producer SQM rose more than 3% in Santiago on Tuesday after Scotiabank reiterated its bullish stance on the company.
The bank said its recent meetings with executives reinforced expectations for strong lithium demand growth and underscored SQM's cost advantages at Chile's Salar de Atacama.
• In a note after meeting with SQM Chief Financial Officer Gerardo Illanes and Head of Investor Relations Isabel Bendeck, Scotiabank maintained
its "Sector Outperform" rating and a $105 price target, calling SQM one of its top picks for 2026.
• The broker said SQM sees lithium incentive pricing at around $18 per kilogram, within a broader $15-to-$20 range, and believes demand will keep expanding sharply through the end of the decade, requiring new supply from market entrants.
• The note also said SQM's all-in lithium cost, excluding payments to state development agency Corfo, is about $4,500 per metric ton, helping preserve its position as one of the industry's lowest-cost producers.
• Scotiabank said SQM expects to decide in coming months whether to pursue an expansion at the Mt. Holland project in Australia that could double capacity to 100,000 metric tons, with half of that attributable to SQM.
• The bank also said SQM saw strong economics in battery energy storage systems, or BESS, where it views lithium demand growth as increasingly driven by cost competitiveness rather than consumer preference.
• Scotiabank said SQM does not expect to maintain its current market share indefinitely, and that the company said industry growth is too rapid for any single producer to keep pace.
• SQM noted that environmental permitting remains the main constraint on new lithium supply.
(Reporting by Kylie Madry, Editing by Daina Solomon)
