For the Quarter Ending December 2022
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.
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.
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.
For the Quarter Ending September 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.
During the second quarter of 2022, the Lithium Hydroxide in the US domestic market remained bullish. Constant Swidling of the benchmark pricing and robust growth in the trajectory made the US authorities restrategize by securing a made-in-America supply chain for critical minerals. The democrats announced significant investments to expand vital domestic minerals that break the dependence on China and boost sustainable practices. As the world transit toward a greener economy, global demand for the Lithium substitutes such as Lithium Hydroxide will soar steeply by 400-600% in the next several decades, with the inquiries from the EV market set to soar by 4000%.The overall supply in the domestic market tightened due to the retaliatory sanctions imposed by the US authorities on Russia. As a ripple effect, the supplies for essential raw materials were disrupted, resulting in an unprecedented drop in the offered quotations of Lithium Hydroxide dropped by -8.5% during Q2 2022.
In the second quarter of 2022, the sentiments toward Lithium Hydroxide in the Asia pacific market fluctuated throughout the quarter. This market development is majorly attributed to the slow market activities amidst the resurgence of COVID that halted production in the downstream industries that significantly impacted Lithium Hydroxide's demand outlook in the spot market. The pessimist sentiments prevailed across the suppliers in China that were further suppressed by the inspection of the Chinese authorities over the high market competition backed surge in offers that challenge the sustainable transition towards a greener economy. However, the market sentiments increased after the Chinese authorities released the restrictions by the second half of the quarter. As a ripple effect, the quotations at Ex-Shenzhen settled at USD 73190 per tonne, during the quarter ending June 2022.
In Q2 2022, the market sentiments toward Lithium Hydroxide across Europe have primarily been impacted by the conflict in the eastern European region and China's COVID lockdown. The producer's quotations observed consistent fluctuations, although the EV battery players in the European market reap the better netbacks as the EV production in China was sluggish amidst the lockdown across the region. At the same time, the European players were hesitant to pressure the Russian cargoes at the Black sea amidst the retaliatory sanctions on Russia, which presented a further shortage of other critical raw materials. Although the domestic demand outlook dominates against the supply despite the slumped EV production in the European markets led to the persistent bullish sentiments across the Eurozone. As a ripple effect, the quotations dropped drastically monthly, and DDP Antwerp discussions were settled at USD 74602 per tonne in May 2022.