March 2024: German Lithium Fluoride Market Stabilises Amidst EV Market Stagnation

Hamburg, Germany: The German lithium fluoride market has noted stability throughout March 2024 as the overall electric vehicle market has not observed any major shifts. The influx of low-priced lithium fluoride from the Asian market coupled with poor consumer demand for the lithium-ion battery manufacturing industry weighed upon the market fundamentals, with the prices of lithium fluoride remaining within a range.

Additionally, in upstream markets of lithium fluoride, the prices of lithium salts prices in the US and European domestic markets have held steady this month. Demand for lithium fluoride from downstream battery and Energy Storage Systems manufacturers remained moderate. Abundant local stocks of lithium fluoride were primarily due to past extensive procurement and slow consumption rates. However, the recent drought in the Panama Canal has restricted ship traffic, along with the Red Sea disruption forcing many vessels to take longer sea routes, resulting in higher costs and freight charges. Consequently, shipments of lithium fluoride continue to remain delayed.

Despite the German government discontinuing its electric car subsidy program in December 2023, Germany remains at the forefront of electric vehicle adoption. In February, battery-electric cars maintained a market share of more than 10%. Sales of battery-electric cars in February grew by a modest 9%, retaining their stable market share. Among the four largest markets, Belgium, France, and the Netherlands experienced significant growth, while registrations in Germany declined slightly.

Hybrid-electric cars saw a surge in sales by 24.7%, with substantial growth observed in the four largest markets: France, Spain, Germany, and Italy. These markets collectively account for over 70% of EU sales, capturing 28.9% of the market. Registrations of plug-in hybrid electric cars also increased notably by 11.6%, driven by solid growth in key markets such as Germany, Belgium, and France.

European automakers are making substantial investments to transition their vehicles and operations to emission-free models, following stringent government mandates for carbon neutrality by 2050. Nevertheless, they trail behind Chinese electric vehicle manufacturers in developing a comprehensive, end-to-end supply chain of battery raw materials including lithium fluoride for battery electric vehicles. Chinese automakers are now setting their sights on the European market, exporting BEVs for both consumer and fleet sales.

The ChemAnalyst database suggests that lithium fluoride prices are expected to remain stable in the coming weeks, supported by projected growth in new electric vehicle (EV) sales and increased consumer confidence. For Euro 7 to fully achieve its goals, policymakers need to prioritize the replacement of older, more polluting vehicles on the roads with newer models that feature the most advanced emission technology available. Eventually, soon, the demand for lithium salts including lithium fluoride is poised to improve.