Chilean lithium producer SQM forecasts a 25% year-on-year increase in global lithium demand for 2026, driven by rising electric vehicle production and battery storage investments. The projection underscores tightening supply dynamics in the critical mineral market.
- SQM forecasts 25% global lithium demand growth in 2026
- Projected demand exceeds 2.8 million metric tons of lithium carbonate equivalent (LCE)
- SQM's production capacity remains at 180,000 metric tons LCE annually
- Spot prices for lithium carbonate stabilized above $18,000 per ton in early 2026
- Major battery manufacturers securing long-term supply contracts at prices over $20,000 per ton
- Growing policy focus on domestic processing and recycling in key consuming nations
Lithium producer SQM has raised its outlook for global demand growth, projecting a 25% increase in 2026 compared to 2025 levels. The forecast reflects accelerating adoption of electric vehicles and expanding deployment of grid-scale energy storage systems worldwide. The company, which operates extensive brine extraction sites in Chile’s Atacama Desert, cites strong forward orders from battery manufacturers as a key indicator of demand strength. The 25% growth estimate implies global lithium demand could exceed 2.8 million metric tons of lithium carbonate equivalent (LCE) by year-end, up from approximately 2.24 million tons in 2025. This expansion rate significantly outpaces current production capacity, highlighting growing supply constraints. SQM’s own production capacity remains at around 180,000 metric tons of LCE annually, with plans to expand output through infrastructure upgrades and new extraction projects in the Atacama region. Market participants are responding to the demand outlook with increased investment in lithium projects, particularly in South America, Australia, and Africa. Battery cell manufacturers in China, South Korea, and the United States have signaled intent to secure long-term supply contracts, with some firms locking in prices above $20,000 per ton for 2026 delivery. Spot prices for lithium carbonate have stabilized above $18,000 per ton in early 2026, reflecting investor confidence in sustained demand. The supply-demand imbalance is also prompting policy discussions in major lithium-consuming countries regarding domestic processing capabilities and critical mineral supply chain resilience. Countries like the U.S., EU, and India are advancing initiatives to reduce reliance on imported lithium compounds, while increasing incentives for recycling and alternative chemistries such as lithium-iron-phosphate (LFP).