(Bloomberg) -- Chile, the biggest supplier of lithium after Australia, sees the battery-metal market remaining relatively tight through next year before swinging into surplus as new supply comes onstream.

Demand for lithium from the electric-vehicle industry is set to grow steadily at more than 16% a year on average through 2035 as the world moves away from fossil fuels, according to a presentation delivered Tuesday by government agency Cochilco.

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The supply side’s reaction to surging prices in 2021 and 2022 will push a fairly well-balanced market into surplus in the 2025-2029 period, according to the presentation. But the first half of the 2030s will be characterized by a growing deficit, Cochilco predicted. To be sure, Chile’s longer-term outlook is slightly less bullish than those of BMI and S&P Global, which project significant deficits by 2030.

Chile is expected to double its output from 2021 to 2035, Cochilco said. The two incumbent producers in Chile, SQM and Albemarle Corp., have about $2.3 billion in approved projects in their pipelines.

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