Lithium Market Outlook: Chile's Production, Global Surplus, and Price Forecasts
Chile's lithium production is projected to reach 285,000 tons of lithium carbonate equivalent (LCE) in 2024 and 305,000 tons in 2025, according to a report by the state agency Cochilco.
Meanwhile, the global market for the lightweight metal is expected to experience a surplus of 89,000 tons in 2024 and 141,000 tons in 2025.
"Lithium prices in December 2024 remain at low levels as sales projections for electric vehicles in 2024 and 2025, made in March, continue to be revised downward, while the market balance surplus estimated at the beginning of the year continues to increase," the report stated.
With prices falling by 78%, "there has been a supply response with cutbacks and a slowdown in both greenfield and brownfield projects, which has brought forward the market rebalancing forecast to 2027-28," the report added.
Cochilco noted that Australia and Chile have maintained their leadership in lithium production, although they have slowed their growth rates in 2023 and 2024.
The Chilean government has sought to boost the industry of this key metal for electric car batteries amid expectations of increased demand in line with global decarbonization efforts.