US Lithium Hydroxide Prices Plummet Amidst Weak Demand and Oversupply, Industry Braces for Continued Bearishness in 2024

Texas, USA: The Lithium Hydroxide prices in the USA tumbled further in December as continued weak demand and oversupply in the domestic market continued to weigh upon market sentiments. The Lithium Hydroxide market is also deteriorating due to the poor performance of other battery chemicals; thus, vendors were focusing on supplying long-term orders. Additionally, the limited domestic transactions were of low volumes, and bulk freight transactions were likewise low during this period. As of December 22, 2023, the prices of Lithium Hydroxide Battery Grade DDP USGC were assessed near USD 18,500/MT.

According to the American Chemistry Council (ACC), US chemical volumes are set to increase marginally in 2024 due to low inventories and widespread destocking throughout most value chains. Observers pointed out a relatively calm environment in the physical market as participants geared up for the end of the year.

A significant contributor to the drop in prices can be attributed to diminished consumer demand and oversaturated markets in Asia, particularly China. This decline is primarily a result of the global slowdown in the adoption of electric vehicles, exacerbated by elevated interest rates. Notably, China has experienced a substantial 78% decrease in the average price of the upstream battery-grade lithium carbonate since the previous year. Chilean miners have recently pointed fingers at excess inventories, predominantly concentrated in Asia, as a major factor responsible for the sharp decline in Lithium Hydroxide prices. It is anticipated that the global market will not undergo a rebalancing until the conclusion of the upcoming year.

Industry experts remarked that prices of battery-grade Lithium Hydroxide chemicals closely mirrored those in Asia, with the majority noting that the market was either at parity or held a slight premium. Following falls in East Asia, Lithium Hydroxide prices fell slightly more sharply, with investors citing adequate supply. Because there is enough material on the market to meet consumer demand, sellers had to adjust their prices to reflect this.

According to the ChemAnalyst database, the prices of Lithium Hydroxide are poised to demonstrate a further bearish trend in the first quarter of 2024. Expectations suggest that Lithium Hydroxide prices will continue to decrease, given the current bleak market conditions and persistently low demand across nations. Concerns about the Lithium Hydroxide market persist, possibly contributing to a further decline. Moreover, in the USA, a cautious approach by customers, complicated market dynamics, and inventory management issues might lead to a further reduction in Lithium Hydroxide prices.