The world’s largest lithium producer, SQM, has announced a long-term agreement to supply LG Energy Solutions with approximately 55,000 metric tons of lithium products from 2021 to 2029.
SQM (SQM) said in a statement that, “the signing of this large-scale long-term supply agreement is an important milestone for SQM not only because it is part of its growth strategy, but also because it solidifies its prominent position as a high-quality lithium supplier for the production of batteries for electric vehicles.”
LG Energy is the battery making division of the largest Korean chemical company, LG Chemical, which supplies electric car batteries to auto companies including Tesla and GM.
In September 2020, LG Chemical unveiled its plan to publicly list its energy division under the name of LG Energy Solutions by December.
SQM shares were up around 1.5% in pre-market trading at the time of writing and have gained almost 80% year-to-date. (See SQM stock analysis on TipRanks)
BMO Capital analyst Joel Jackson recently upgraded his rating on the stock to a Buy and set his price target at $57 (20% upside potential).
Consensus among analysts is a Moderate Buy based on 2 Buys and 1 Hold. The average price target of $43.50 implies downside potential of approximately 9% over the next 12 months.
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