US Lithium Hydroxide Prices Rise Amid Costly Imports, EV Market Uncertainty Persists

Texas, USA: During the first half of November, Lithium Hydroxide prices inclined marginally in the USA market as imports of expensive goods continued. Amid recent inquiries from the Asian markets, the sellers have raised their offered quotations for Lithium Hydroxide. Chile continues to maintain strong Lithium Hydroxide production, reaffirming its status as a leading global producer with stable output levels. However, the demand for lithium salts faces challenges due to a global oversupply. Chile's Lithium Hydroxide exports continue to lead globally, with steady demand for lithium salts, which are primarily used in battery production for electric vehicles.

The major exporter, Chile's Lithium Carbonate and Lithium Hydroxide production remains strong, with its position as a leading global producer bolstered by ongoing output stability, which eases the supply concerns of Lithium Hydroxide. Sociedad Química y Minera de Chile (SQM) is maintaining significant production levels, targeting an installed capacity of 210,000 metric tons of lithium carbonate this year.

The demand is facing headwinds due to a global oversupply situation that has impacted the Lithium Hydroxide market. Despite robust production capabilities, the market remains pressured by reduced EV demand in key markets like China and price-driven hesitance among manufacturers to expand operations. As per the latest assessment, prices of Lithium Hydroxide settled at USD 11600/MT Battery Grade DDP USGC.

New estimates indicate that electric vehicle (EV) sales in the U.S. experienced a year-over-year increase of more than 10% in the third quarter, reaching record levels for both total volume and market share. According to the most recent data, around 346,309 EVs were sold in Q3 2024, which marks a 5% rise compared to Q2. The proportion of EV sales in Q3 climbed to 8.9%, the highest ever recorded, up from 7.8% in Q3 2023.

Additionally, in recent developments, Donald Trump's proposals to roll back support for the electric vehicle (EV) industry, including eliminating tax credits and sections of the Inflation Reduction Act, has significantly raised concerns in the EV market and the lithium-ion battery supply chain, particularly for critical materials like Lithium Hydroxide. Eliminating tax credits for EV purchases could deter potential buyers, slowing EV adoption rates in the U.S., especially in cost-sensitive segments. This would widen the gap between traditional internal combustion engine (ICE) vehicles and EVs in terms of affordability.

A potential decline in EV sales would reduce the demand for lithium-ion batteries, directly affecting the consumption of Lithium Hydroxide, a key component in cathode materials for high-performance batteries. The Inflation Reduction Act supports domestic lithium production and processing to reduce reliance on imports, especially from China. As per ChemAnalyst, the rolling back these provisions could slow the development of a domestic lithium supply chain, increasing U.S. dependency on foreign sources.