Why Sociedad Quimica Y Minera de Chile Stock Popped Today
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SQM stock isn't cheap. Could a boom in Chinese lithium prices make it a buy anyway?Shares of Sociedad Quimica Y Minera de Chile S.A. (SQM +6.09%), one of the biggest stocks in Chile and a key international supplier of lithium for electric car batteries, jumped 5% through 11:25 a.m. ET. You can thank China for the good news. Image source: Getty Images. Chinese moves the market The Bureau of Natural Resources in Yichun, Jiangxi Province, plans to cancel 27 lithium mining permits in January, as Mining.com reports today. Lithium prices in China reacted immediately, rising 7.6% Wednesday, and this pushed global lithium mining stocks higher. Granted, "all of the licences had already expired, some more than a decade ago, and most were registered for ceramic clay or limestone mining," as Mining.com observes. And that raises a question: Will this really impact lithium prices? Lithium analysts don't think so. One analyst is quoted saying, "the licence cancellations would have little impact on supply, as none of the revoked permits covered operating mines." Yet, as long as the licenses remained active, mining might potentially have resumed at any of the sites, legally, and that would add to the global lithium supply. It can't happen now until the licenses are officially renewed.Advertisement Long story short: The chance of lithium supply growing just got a little smaller -- and the chance of lithium prices rising in the future got a little bigger. ExpandNYSE: SQMSociedad Química Y Minera De ChileToday's Change(6.09%) $3.91Current Price$68.08Key Data PointsMarket Cap$9.2BDay's Range$67.07 - $69.6452wk Range$29.36 - $69.64Volume45KAvg Vol1.5MGross Margin27.33% Is SQM stock a buy? That's good news for investors in Sociedad Quimica, aka "SQM," and here's even better news: SQM is one of the few lithium companies that's already profitable without these potential price hikes. Last year, SQM earned $525 million, and generated positive free cash flow to boot. Valued at 35 times trailing earnings, SQM isn't exactly "cheap," but if you're betting on a lithium price boom, SQM is a much better bet than most alternatives.About the AuthorRich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”TMFDittyX@RichSmithFoolRead NextNov 17, 2025 •By Rich SmithWhy Sociedad Quimica Stock Powered Higher TodayJun 4, 2025 •By Rich SmithWhy Sociedad Quimica y Minera Stock Popped TodayOct 14, 2024 •By Rich SmithWhy SQM, Standard Lithium, and Piedmont Lithium Stocks All Dropped TodaySep 11, 2024 •By Rich SmithWhy Lithium Stocks Are Rocking TodayFeb 29, 2024 •By Beth McKennaSQM Earnings Drop 82% on Lithium Revenue Plunge of 69%Nov 16, 2023 •By Beth McKennaSQM's Earnings Drop 56% as Lithium Revenue Plunges 45%