US Lithium Hexafluorophosphate Prices See December Slump, Eyes Recovery in Q1 2024

Texas, USA: The US lithium hexafluorophosphate market exhibited a bearish trend in December 2023 as prices tumbled throughout the month due to poor demand from downstream cathode active materials (CAM) manufacturers. In addition to this, US cathode manufacturing firms experienced declining production costs of lithium hexafluorophosphate due to piled-up inventories in the domestic market.

Since the beginning of 2023, Lithium Hexafluorophosphate prices in the United States have been on a downward trend, primarily driven by consistent reductions in the cost of imported raw materials. Furthermore, the escalation of market competition from China prompted lithium-rich Chile to lower its supply quotes, igniting a pricing battle among major industry players and resulting in a considerable reduction in lithium hexafluorophosphate prices.

Moreover, the NCM cathodes market has influenced the lithium hexafluorophosphate market. According to industry experts, certain cathode manufacturers have switched back to lower-nickel cobalt manganese (NCM) cathodes from high-nickel NCM cathodes to decrease costs and entice consumers amid weakening demand for electric vehicles (EVs).

The lithium market has experienced a significant downturn, witnessing an approximately 80% decline in prices throughout the calendar year 2023. In the upstream battery raw materials industry, lithium carbonate prices have largely been down this year, reflecting sluggish demand from battery manufacturers. Consequently, the manufacturing costs of lithium hexafluorophosphate have decreased significantly.

In the United States, the top executive of a major automotive manufacturing company announced a strategic shift in their approach to electric vehicle (EV) production. The company is adjusting the acceleration of EV production in North America to protect pricing amidst slower near-term growth in demand. Furthermore, they outlined plans to implement engineering efficiencies and other improvements aimed at reducing the production cost of vehicles and enhancing overall profitability.

According to the ChemAnalyst database, the lithium hexafluorophosphate market is poised to demonstrate improvement in the first quarter of 2024. Substantial growth in the USA’s Lithium Hexafluorophosphate market is anticipated to be driven by strong demand from downstream battery manufacturing and OEM manufacturing sectors. Increased sales of Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) also contribute to the rising demand for Lithium Hexafluorophosphate, aligning with the focus on sustainable development and a more environmentally friendly economy. Forward-thinking government initiatives like the Inflation Reduction Act in the United States, which centers on enhancing domestic supply chains for EVs, batteries, and minerals, are poised to drive the penetration of the electric vehicle market in the coming decade and beyond.