Overall Market Forecast
Chile's Copper Commission (COCHILCO) released its lithium market forecast report for 2025-2026 on September 4. Global lithium supply in 2025 is projected at 1.443 million tons in lithium carbonate equivalent, with demand at 1.34 million tons, resulting in a supply surplus of 103,000 tons. In 2026, both demand and supply are expected to expand, with a projected surplus of 60,000 tons.
Price Trends and Factor Analysis
Lithium prices have declined significantly since 2023 due to oversupply. Despite increased demand from the electric vehicle (EV) battery industry, oversupply persists due to uncertain macroeconomic conditions, geopolitical risks, the end of US EV subsidies, and the emergence of new supply countries such as those in Africa. However, prices have turned upward following China's Zangge Mining's lithium production halt in July.
2026 Price Forecast
Asian CIF prices for 2026 are projected at $10,327 per ton for lithium carbonate and $10,920 per ton for lithium hydroxide, exceeding the peak values through August 27. However, the sustainability of this price increase depends on the duration of production shutdowns and the scale of producers.
EV Market Growth Outlook
As energy transition progresses, the EV industry continues to be the main driver of the lithium market, with global EV sales forecast to grow 23.9% year-over-year in 2025 and 14.7% in 2026. However, tariffs on Chinese EVs, batteries, and raw materials could increase costs and potentially slow the pace of EV adoption.
Chile's Production Trends
Chile's lithium production reached 296,908 tons in lithium carbonate equivalent in 2024. Production is expected to reach 300,000 tons in 2025 and 300,500 tons in 2026, showing modest growth.