Chile raised its lithium production forecast for this year, although slowing demand growth and rising supply are expected to push the global market back to surplus in 2027. Chile, the world's third-largest producer of lithium, will produce about 325,000 tons of lithium carbonate equivalent in 2026, higher than the 305,000 tons forecast a year ago, the Chilean National Copper Commission said on Thursday. Production is expected to rise to 335,000 tons in 2027. Driven by rapid growth in battery energy storage systems, global demand for lithium is expected to grow 25% this year to 2.08 million tons, which is about 34% higher than Cochilco's forecast a year ago. However, demand growth is expected to slow sharply to 8% in 2027, when consumption will reach 2.25 million tons. Cochilco expects a global supply shortage of 79,000 tons this year, compared to an oversupply of 60,000 tons a year ago. By 2027, as new supplies gradually enter the market, the supply growth rate is expected to exceed demand, driving the market back to 42,000 tons of excess.

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