Chile will lose place in the world ranking of lithium against Argentina

Chile, the second largest lithium supplierwe anticipate losing more market share to Australia and Argentina over the next decade, relegating it to third place in the world ranking of production.

State company Cochilco expects Chilean production of the key ingredient in electric car batteries to double by 2035 to 336,000 metric tons, while Argentina’s will resolve to 415,000 tons, according to a report published Tuesday.

Much of the additional capacity cited in the report will be built later this year in operations run by SQM and Albemarle Corp., raising concerns about the pace of growth of brine projects.

Undoubtedly, the Cochilco figures only cover the expansions of SQM and Albemarle, as well as the possible production of companies led by Codelco in the Maricunga salt flat. Future public-private projects under the new government model for industry could increase the numbers.

In the short term, Cochilco sees the lithium market looking relatively tight over the next year before turning into a surplus as new supply comes on board after prices have been compromised for the past two years. However, the first half of the 2030s will be characterized by a growing deficitforecast.

The only two lithium companies that produce in Argentina announced their merger

Although Chile’s projections for the coming years are very much in line with other forecasters, its longer-term outlook is less bullish than those of BMI and S&P Global, which project significant deficits by 2030.

Industry demand for electric vehicles is expected to grow steadily at an average of 16% a year through 2035 as the world moves away from fossil fuels, according to Cochilco’s presentation.

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