Chile's Cochilco: Lithium Oversupply to Rise in 2025

---

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Chilean mining authority Cochilco said Thursday it foresees an increase in the oversupply of lithium carbonate equivalent (LCE) for 2024 and 2025. According to the institution, last year's supply exceeded lithium demand by 89,000 tons, while this year's number will increase to 141,000 tons.

Even so, demand for lithium is forecast to increase by roughly 51% in 2025 compared to 2023 volumes, spurred by the electric vehicle battery sector.

The electric vehicle industry has been hit by weakness in the Chinese economy, the biggest market for electric cars. However, the Chilean institution foresees an increase in the sale of electric vehicles to 16.4 million units in 2024 and 20.4 million this year.

For 2024, Cochilco said it estimated lithium demand for battery manufacturing at 982,000 tons, or about 87% of the total demand, while this year, it is expected to reach 89% of the volumes.

As a result of the oversupply of LCE, the mineral's price collapsed by as much as 78% in 2024, impacting the operations of companies and mines worldwide.

From the highs of almost US$60,000 per ton of lithium carbonate in 2022, price projections for December last year were at US$10,200 per ton. For November this year, the lithium carbonate price is expected to rise to US$11,400 per ton, and it will continue increasing until reaching almost US$17,000 by 2028, according to Cochilco.

However, the recent price drop has forced companies such as Rio Tinto (NYSE:RIO) (London, England), Pilbara Minerals (West Perth, Australia) and Core Lithium (Perth, Australia) to suspend operations. Others, such as Liontown Resources (West Perth, Australia) or IGO Limited (South Perth, Australia), reduced production goals for the year. Finally, some players opted to put their operations in maintenance based on information gathered by Cochilco.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).