Cochilco: Chinese Demand and BESS to Buoy Lithium Prices

---

Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

---

Summary

Electric vehicles, production setbacks in China, and BESS are expected to keep lithium prices high in the short term. South American countries are poised to be winners as the lithium market recovers from the 2025 low prices.

---

Lithium Prices to Remain Higher, for Now

Cochilco, the Chilean mining authority, said it expects lithium prices to remain elevated in the short term, driven by stronger demand. After low prices in 2025, lithium prices recovered toward year-end, driven by the demand for new technologies. Lithium carbonate prices in 2025 for EXW China averaged US$10,454 per ton.

China has experienced policy changes and lower lithium production at domestic mines, according to Cochilco. Meanwhile, lithium demand in the Chinese market will remain high as consumers replenish stocks ahead of the Chinese New Year.

A key lithium supplier in China, Contemporary Amperex Technology Co., Limited's (CATL) Jianxiawo lithium mine, suspended operations after its permit expired. According to Benchmark Minerals, the mine is expected to restart after the Chinese New Year on Tuesday, February 17. Also, in December, Chinese authorities revoked 27 mining licenses in Jiangxi province, a key lithium-producing province. The projects were inactive, but the decision indicates greater scrutiny of mining projects, according to Cochilco.

Meanwhile, demand is also driven by battery energy storage systems (BESS), which were the fastest-growing segment in 2025, with a 51% year-on-year increase. The use of BESS is dominated by the expansion of storage systems for renewable energy technologies such as solar and wind. Cochilco projects BESS expansion of 50-55% for this year, leading to more than 190,000 tons of lithium carbonate equivalent (LCE) of new demand.

At the same time, demand for electric vehicles (EVs), which use lithium batteries, is increasing the need for lithium. In December, Chinese consumers rushed to buy EVs amid fiscal incentives, according to Cochilco. For more information on EVs and lithium, see February 9, 2026, article - Two Roads Diverge: U.S., China Head in Opposite Directions on EV Adoption.

The Lithium Triangle

Chile, Argentina and Bolivia are poised to be the big winners in the recovery of lithium prices.

Chile is expanding its lithium industry. In recent weeks, Codelco, the state Chilean miner, announced the creation of NovaAndino, a joint venture with SQM to develop the Atacama salt flats. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Plant Database can view the plant profile.

Also, the company partnered with Quiborax to pursue a contract to develop the Ascotan salt flat. In 2025, Rio Tinto set a strong foot in the country by partnering with Codelco and Enami to develop the Maricunga and Altosandinos salt flats. GMI subscribers can view these project reports.

Meanwhile, Albemarle continues to produce LCE from its assets in the country.

Also, Argentina is expanding its production, with 13 operational mines and plants in the country. International players such as Rio Tinto are betting on Argentina's lithium expansion. Industrial Info is tracking 80 lithium-related projects in the country, worth US$24.45 billion. Of those, 71 projects are expected to be completed by the end of 2030.

Meanwhile, the new Bolivian government of Rodrigo Paz wants to attract international investments to the world's largest resources of 23 million tons of lithium. Despite lithium agreements with Chinese and Russian companies signed under previous governments, the nation's lithium industry remains largely undeveloped. Paz is pushing for a new lithium law that provides a stable framework for companies to come and exploit the nation's resources.

Key Takeaways

• Cochilco forecasts high lithium prices in the short term.
• Production setbacks, BESS, and EVs are driving demand.
• South American countries are set to benefit from price recovery.

---

About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
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 over 250,000 current and future projects worth $30.2 Trillion (USD).