Lithium Hydroxide Market Faces Bearish Wave: Prices Plummet Amid Global Oversupply

Antwerp, Belgium: The Lithium Hydroxide market continued its bearish trend, with prices plunging further in December 2023 due to weak demand and imports of low-priced goods. The downstream lithium-ion battery manufacturing sector faced low demand, attributed to a cautious consumer market adopting a wait-and-see approach amid declining prices. Besides the demand side, manufacturing firms reported shrinking profit margins due to plummeting production costs of Lithium Hydroxide. The prices of the feedstock, Lithium Carbonate, dropped by more than 6.0% amid a demand slump across the European Union. Additionally, throughout the month, manufacturers in exporting nations maintained lower run rates as the majority of markets remained oversupplied, and destocking practices were high towards the end of the year.

Apart from the domestic market, the North American and European markets were heavily influenced by the Chinese market, the major player. Excessive imports from Zimbabwe and Australia left the Chinese market oversupplied, resulting in poor new order growth and overall bearish sentiments worldwide. On the other hand, according to data released by the National Automobile Dealer Association (NADA), sales of battery electric vehicles (BEVs) in the January to November period stood at 1,007,984 units, a significant rise of 50.7% year-on-year.

As of December 2023, the assessed prices of Lithium Hydroxide Battery Grade DDP Antwerp were at USD 19,000/MT, a drop of more than 6% from the previous month. Industry experts noted that prices of battery-grade Lithium Hydroxide chemicals closely mirrored those in Asia, with most indicating that the market was either at parity or held a slight premium. In East Asia, Lithium Hydroxide prices have seen a more pronounced decline, as investors point to a sufficient supply contributing to the downward trend. Due to sufficient material on the market to meet consumer demand, sellers had to adjust prices accordingly.

According to the ChemAnalyst database, the Lithium Hydroxide market in Belgium is expected to experience continued weakness in the first quarter of 2024. Lithium Hydroxide prices are likely to see a further decline in the coming weeks due to current challenging market conditions, persistently low demand across nations, and ongoing concerns surrounding the Lithium Hydroxide market. Factors such as cautious consumer behavior, intricate market dynamics, and inventory management may have contributed to the decrease in Lithium Hydroxide prices in Belgium. The energy storage industry, the second-largest user of lithium, is expected to see a slower growth rate due to reduced demand on both domestic and international fronts. Australia and Latin America, the primary producers, are forecasted to experience a 22% and 29% rise in production, respectively, creating further oversupply in the Lithium Hydroxide market.