Lithium Hexafluorophosphate Market Struggles with Weak Demand and Pricing Amid Downstream Challenges

Hamburg, Germany: The German lithium hexafluorophosphate market has experienced weak supply and demand fundamentals since the beginning of January 2024, with prices continuing to decline. According to industry insiders, the demand for lithium hexafluorophosphate in the cathode active materials (CAM) manufacturing industries has been sluggish, attributed to the falling prices of lithium hexafluorophosphate, leading to a reluctance toward new purchases.

One of the contributing factors to the decline in lithium hexafluorophosphate prices, apart from weak consumer demand, is the lack of support from upstream markets. Cost support from the upstream lithium carbonate and lithium hydroxide markets has remained weak, as prices have been tumbling since the start of 2023. Consequently, the overall downstream value chain has experienced a significant decline in manufacturing costs. In the final month of 2023, upstream lithium hydroxide prices continued a bearish trend, further declining due to weak demand and the influx of low-priced imports.

The lithium-ion battery manufacturing sector has faced diminished demand as consumers adopted a cautious stance, awaiting market developments amidst falling prices of lithium hexafluorophosphate. Beyond demand concerns, manufacturing firms have reported squeezed profit margins, a consequence of plummeting production costs for lithium hexafluorophosphate. Prices of the feedstock, Lithium Carbonate, also witnessed a decrease exceeding 6.0% in December 2023, amid reduced demand.

Additionally, significant influence from the Chinese market, a major player in the EV industry, has impacted the market sentiments of lithium hexafluorophosphate. Excessive imports of raw materials from Zimbabwe and Australia have left the Chinese market oversupplied, resulting in poor new order growth globally and an overall bearish sentiment in all lithium salt markets, including lithium hexafluorophosphate.

On the other hand, data from the National Automobile Dealer Association (NADA) revealed a noteworthy 50.7% year-on-year increase in battery electric vehicle (BEV) sales, reaching 1,007,984 units from January to November in the European market.

According to the ChemAnalyst database, the lithium hexafluorophosphate market is anticipated to demonstrate a stable pricing trend in the upcoming weeks. Many companies are placing emphasis on maintaining stable pricing strategies. On the supply side, manufacturers of lithium salt in the exporting nations are sustaining stable production levels. Companies that strongly support price stability in the lithium hexafluorophosphate market are largely maintaining their pricing approaches as they were prior to the holiday period. Currently, they are showing limited interest in procuring large quantities of lithium carbonate at elevated prices in downstream and terminal markets. However, the demand outlook is anticipated to remain stable.