For the Quarter Ending March 2023
North America
The Lithium Hydroxide market in US domestic region exhibited bearish market sentiments throughout the first quarter of 2023. In the first month, the prices dropped consistently amid restricted market activities in the Asian region. The regional competition dropped amongst lithium-ion battery manufacturers. In February, the prices slid down amid constrained market activities in the Asian region. The cost support from the upstream Lithium Carbonate in the region was weak thus, lowered the production costs. In March, amidst uncertainties regarding the economic conditions and slower overseas inquiries, the market prices of Lithium Hydroxide plummeted. Throughout Q1, the cost support from Lithium Carbonate remained weak, and in the last few weeks, the production rates were lowered amid higher levels of inventory in the region. Thus, the prices of Lithium Hydroxide Battery Grade DDP USGC settled at USD 67947 per tonne at the end of Q1 2023.
APAC
The Lithium Hydroxide market in China remained on a bearish trajectory throughout the first quarter of 2023. In January, the NEV subsidies ended, due to which the downstream players were cautious about new orders of the product and the disruption in transportation as the logistics enterprises stopped responding to new inquiries a few weeks before the holidays. In February and March, the market prices of Lithium Hydroxide plummeted considerably amid weaker cost support from the upstream Lithium Carbonate in the region. In the last few weeks of Q1, the production rates dropped as ample inventories of the product were present in the region, and the demand outlook remained suppressed amid limited market transactions in the region. Thus, the prices of Lithium Hydroxide Battery Grade FOB Shenzhen settled at USD 57597 per tonne at the end of Q1 2023.
Europe
Throughout the first quarter of 2023, the market prices of Lithium Hydroxide showcased a bearish pricing trend in the Belgian domestic market. In January, the prices plunged, moving identically to the benchmark offers in the Asian markets. In addition, the rise in inflation and energy prices in the European market kept the operating rates restricted. In February, the prices decreased amid a drop in regional market competition among electric vehicle manufacturers. The procurement rates dropped in this period due to lower electric vehicle sales in the Chinese domestic market, leading to uncertain market conditions. In March, the prices dropped further amidst the electric car pricing war amongst the market giants, and the domestic manufacturers slashed electric vehicle prices amid rising market competitiveness. Thus, the market prices of Lithium Hydroxide Battery Grade DDP Antwerp settled at USD 69120 per tonne at the end of Q1 2023.
For the Quarter Ending December 2022
North America
Overall the Lithium Hydroxide market in the North American region observed a slight slowdown during the fourth quarter of 2022. This market trend has been majorly contributed by the curtailment in offtakes and restricted new inquiries from overseas markets. Traditionally during December, the far east Asian market players will restrict the cash outflow from the organizations to improve the financials for the annual reports, whereas the Chinese market also observed a slackening of new orders after EV sales dropped in the region. In response, the supply-demand dynamics for Lithium Hydroxide across the North American region have narrowed, impacting the quotes offered by the manufacturers by countering the persistent growth of Lithium Hydroxide in the US domestic market. As a ripple effect, the DDP USGC discussions for Lithium Hydroxide were assessed at USD 74665 per tonne in December 2022.
Asia Pacific
In the fourth quarter of 2022, the Lithium Hydroxide market in Asia Pacific has remained on an upward trajectory. However, the constant growth was restricted by tepid sentiments at the spot market. As per the market participants, the overall market dynamics for Lithium were ambiguous, supporting the slowdown from the downstream side. The drop in sales of EVs in China, coupled with the restriction of cash outflow by the far east Asian players, has levied a significant drop in new no of I queries for Lithium Hydroxide. However, the restricted volumes available for Lithium Hydroxide didn’t widen the negotiation window as much as for Lithium Carbonate. Even though the cost support from feedstock spodumene hovered at higher levels, its impact was marly minimal. As a ripple effect, the CIF Busan discussion for Lithium Hydroxide was assessed at USD 80148 per tonne in December 2022.
Europe
The Lithium Hydroxide market in Europe observed a consistent fluctuation throughout the fourth quarter of 2022. In an initial couple of months, the Lithium Hydroxide market took a bullish run amidst the improved market activities post the long summer holidays. However, the soaring inflation and interest rates, along with the depreciation of the USD, have weakened sentiments amongst the market participants in the domestic market. As a ripple effect, the European market players lacked market competitiveness and reduced the operating rates at the manufacturing facilities to curb the impact of higher energy costs amidst the dropping temperature in North Werst Europe. As a ripple effect, the DDP Antwerp discussions for Lithium Hydroxide were assessed at USD 79500 per tonne in December 2022.
In the third quarter of 2022, the Lithium Hydroxide market witnessed a staggering upward trend. This development has been majorly attributed to the consistent soaring dynamics of the EVs market in the North American region. The offtakes have remained constant, and the availability in the spot market has remained staggering. According to major market players, the delivery date has slipped to the end of the first quarter of 2023 for the overseas market participants. In the current supply-demand scenario, it has been estimated that the expansion of 59 new mines with a minimum capacity of 45KTPA was required, with proper recycling infrastructure by 2035 to match the rising demand. Although, in the current market dynamics majority of the supply was concentrated toward contractual deliveries against the tight supply outlook. As a ripple effect, the DDP USGC discussions for Lithium Hydroxide were assessed at USD 65929 per tonne during the quarter ending September 2022.
Overall, the Lithium Hydroxide market in the Asia Pacific region remained bullish in the domestic market. Thus, development has been majorly attributed to the mismatched supply-demand dynamics of Lithium Carbonate. The demand constantly inclined against the depreciating supply outlook as the operations at several facilities were curtailed. At the same time, Tianqui and Yahua Lithium suspended their operations temporarily. As a ripple effect, the supply was pressurized, whereas the demand soared tremendously ahead of the peak rush in the Chinese domestic market. The Ex-Shenzhen discussions for Lithium Hydroxide were assessed at USD 70470 per tonne. Most quotes in domestic currency growth do not reflect in USD amidst the depreciation of CNY against the USD in the third quarter.
Overall, the Lithium Hydroxide market in the European region was muted for the majority of the Third quarter due to the prolonged summer holidays. The spot arbitrage and operation at the downstream manufacturing facilities remained subdued, and the offers for the Lithium Carbonate on DDP Antwerp were assessed at USD 74989 per tonne during the quarter ending in September. In mid-September, as the market activities across Northwest Europe resumed, the European Union passed the "Critical Raw Material Act" to secure the supply of Lithium and rare earth metal. Its demand is anticipated to increase by five folds by 2030 to replace oil & gas in an ambition to become the climate-neutral continent. The Critical Raw Material Act will help focus on strategic applications, networking amongst the European agencies, a more resilient supply chain, and a solid & sustainable level playing field.
