Cochilco sees lithium shortage, price increases from 2031

The Chilean Copper Commission (Cochilco) forecast on Tuesday a “strong” lithium shortage and significant price hikes from 2031, as demand surges for the metal used to make batteries for electric vehicles.

A presentation by the state-run entity showed annual global demand at 3.8 million tonnes by 2035, far exceeding estimated worldwide production of 2.46 million tonnes.

Cochilco research head Victor Garay said lithium projects could increase production by around 2035, narrowing the gap between supply and demand.

Chile, the world’s second largest lithium producer, is set to produce 336,000 tonnes of the metal per year by 2035, double the 2021 level, Cochilco data showed.

Argentina’s annual output would climb to 415,000 tonnes, from 28,000.

Cochilco is working on establishing a model to estimate the price of lithium as the commission does with the copper market, but instability in prices has delayed the initiative as they are set differently in every contract, said Joaquin Morales, the head of the agency.

(By Fabian Cambero and Valentine Hilaire; Editing by Isabel Woodford and Richard Chang)

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