In 2023, national production reached 270,947 tons of lithium carbonate equivalent, which represents 4.3% more than in 2022 and 120.5% more than in 2020. For this year and next year, production is projected at 275 thousand and 285 thousand tons, respectively, Cochilco reported.
Chile maintained its position as the leading lithium producer in South America during 2023, in addition to being second worldwide behind Australia, according to data from Cochilco in its 2024-2025 Projection for the lithium market.
In 2023, national production reached 270,947 tons of lithium carbonate equivalent (4.3% more than in 2022 and 120.5% more than in 2020). For this year and next year, production is projected at 275 thousand and 285 thousand tons, respectively.
However, lithium prices have plummeted from their 2022 highs, driven by lower demand for electric cars, increased production and reduced purchase volumes of the so-called “white gold.”
CHILE CONTINUES TO LEAD
According to Cochilco, lithium carbonate prices rose significantly in 2022, reaching values close to US$70,000 per ton in Asia.
However, the situation was reversed the following year and also so far in 2024. At the end of July, a ton of lithium carbonate was trading at US$12,000, close to US$12,100 per ton of lithium hydroxide.
While Cochilco lists a number of factors behind this price drop, most of them revolve around the same thing: the electric vehicle market and high expectations that were not met.
EXPECTATIONS FOR ELECTRIC CARS
On the one hand, sales of this type of car have been lower than expected, while countries with the most important markets "began to end or reduce subsidies" for the purchase of electric vehicles.
And while 100% electric models sold less than expected, plug-in hybrids had better numbers thanks to their more affordable prices. However, their batteries are considerably smaller and contain less lithium, affecting demand.
Lithium buyers have also reduced their inventories, limiting purchase volumes even though supply is also on the rise as new projects have begun to extract the mineral.
EXPORTS
In 2023, lithium exports fell by 4% compared to the previous year (US$7.823 billion).
By May 2024, the same amount has accumulated around US$1.59 billion, a 65% drop compared to the previous period, “in line with the slowdown in the price of lithium in international markets. Lithium shipments in the first 5 months of the year were equivalent to 3.8% of the total exported, while in 2023 this figure reached 8.3%.”
The largest market for lithium shipments is by far China (71% through May), followed by South Korea (16%) and Japan (4%).
Finally, Cochilco, based on a “Consensus Forecast” report, projects an average value of lithium carbonate in 2025 of US$16,450 per tonne in the Asian market.
