What if Chile escalates its lithium royalty on producers?
A new margin levy on Chilean lithium producers is a cost/supply shock to SQM and lithium, not a positive industrial-demand impulse — the current roots wrongly lift copper. Tighter producer economics support lithium prices but dent SQM equity and CLP sentiment. Rhymes with Chile's 2023 lithium-nationalization announcement that hit SQM. China (battery supply chain) is the key buyer; the levy raises ex-China cathode costs at the margin.
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The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (electric blue) over time vs the market's (Polymarket, amber), from the past toward the 6–18 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. Chile escalates its lithium royalty with a new margin levy on producers, denting SQM equity and Chilean peso sentiment. The trigger decomposes into signed root‑shocks — Climate/crop supply ▲ · Industrial demand ▼ · Credit spreads ▲ — which propagate through our causal graph to the markets below.