US Lithium Hydroxide Prices Decline Amidst Tepid Demand, Domestic Production Efforts Surges

Texas, USA: The US Lithium Hydroxide prices continue to demonstrate weakness as week-on-week basis during the last week. Demand has remained stagnant, and the procurement of fresh supplies has slowed further due to high domestic inventory levels. Lithium prices were also influenced by subdued sentiment in Asia. In North America, lithium carbonate prices remained steady, while there was a slight drop in Lithium Hydroxide prices.

Electric vehicle sales in the U.S. grew by 11.3% year over year in the second quarter, reaching a record high of 330,463 units, according to new estimates. Total EV sales last quarter increased by 23% compared to Q1. Although Tesla's sales volume declined by 6.3% year-over-year, new products from manufacturers like General Motors contributed to the overall rise in EV sales. In Q2, Tesla's share of EV sales in the U.S. fell below 50% for the first time, landing at 49.7%. Figures suggest that though the prices have declined, the optimism among them persists. For the week ending on 19th July 2024, the prices of Lithium Hydroxide (Battery Grade) DDP USGC were assessed at USD 13600/MT.

In recent times, the manufacturers in the USA have been emphasizing more on domestic production of Lithium Hydroxide. Most cathode plants currently being built in the US and Canada will produce high-nickel cathodes, which require Lithium Hydroxide as a raw material, according to market participants. Currently, there is almost no Lithium Hydroxide production in the US, and the product has a limited shelf life of approximately six months. If one has a cathode plant in the US or Canada and needs to ship Lithium Hydroxide from inland China, you could lose two or three months of shelf life before it even reaches your factory, leaving only two to three months before it essentially expires.

Companies are very interested in sourcing Lithium Hydroxide domestically because it can be delivered to their plant within a few days, giving them much more time to use it in their facility. In the recent developments, based in Reno, Nevada, the battery materials company, ABTC announced last month that it had successfully manufactured demonstration-scale quantities of Lithium Hydroxide at its facility using processing technologies to extract lithium products from claystone.

The company has also partnered with German battery materials producer BASF and California-based Nanotech Energy, a maker of graphene-based energy products for lithium-ion battery production in North America. The company’s Lithium Hydroxide manufacturing unit is presumed to manufacture more lithium than all of the present recyclying plants in the USA.

Claystone is an unconventional lithium resource, similar to geothermal brine or oilfield brine, compared to the two conventional resources – hard rock and brine. Most of ABTC’s Lithium Hydroxide production will be sold to cathode refiners through long-term agreements that include commodity price corrections, but the company will also reserve a portion for sale on the spot market.

As per the ChemAnalyst, the prices of Lithium Hydroxide are anticipated to hold steady in the upcoming week as a rise in consumer demand and enhanced market sentiments in the region are foreseen.