Market Overview:
Lithium hydroxide is mainly used in applications such as energy storage, lithium-ion batteries, lubricating greases, and air conditioning. Lithium-ion batteries find widespread applications in consumer electronics, electric vehicles, and energy storage systems due to their high energy density and low self-discharge. Increasing demand for electric vehicles and need for efficient energy storage systems is expected to drive the demand for lithium-ion batteries which in turn boost the lithium hydroxide market growth over the forecast period.
The Lithium Hydroxide Market is estimated to be valued at US$ 0.61 Bn in 2023 and is expected to exhibit a CAGR of 10% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
The increasing demand for electric vehicles is expected to be a major growth driver for the lithium hydroxide market. Governments across the globe are promoting the adoption of electric vehicles through financial incentives and subsidies. For instance, the Government of India increased incentives for electric vehicles from Rs. 10,000/kWh to Rs. 15,000/kWh for electric four-wheelers in FY 2023 to boost EV adoption. Further, leading automakers are aggressively launching new electric vehicle models. For instance, in January 2023 Tesla started production of Model Y SUVs in Gigafactory Shanghai. The lithium-ion batteries used in EVs require lithium hydroxide as a key component which is anticipated to significantly drive its demand over the forecast period.
Porter's Analysis
Threat of new entrants: The threat of new entrants is moderate as the Lithium Hydroxide Market requires high initial investments in R&D, production facilities and distribution channels. However, threat is increasing due to rising investments from new players.
Bargaining power of buyers: The bargaining power of buyers is high as the market has a large number of buyers globally and buyers can negotiate discounts on bulk purchases or switch to substitutes.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as raw materials are available from a limited number of suppliers globally and are non-substitutable. Suppliers also do not have the capability to integrate forwards.
Threat of new substitutes: Threat of new substitutes is low as Lithium Hydroxide has limited substitutes and is integral to the production of key end use industries like batteries.
Competitive rivalry: Intense due to presence of global players.
SWOT Analysis
Strengths: Growing demand for lithium ion batteries from automotive and energy storage industries. Strong R&D focus of key players to develop cost-effective production processes.
Weaknesses: High initial investments and volatile lithium prices affect profits. Supply constraints and geographic concentration of resources.
Opportunities: Increasing global focus on adoption of electric vehicles to boost demand. Expanding energy storage applications especially in renewable energy sector.
Threats: Fluctuations in currencies exchange rates and economic downturns affecting key markets. Trade wars and geopolitical risks associated with sourcing of raw materials.
Key Takeaways
The Global Lithium Hydroxide Market Size is expected to witness high growth, exhibiting CAGR of 10% over the forecast period, due to increasing adoption of electric vehicles worldwide. EV sales are surging due to supportive government policies and declining battery costs. This is rapidly driving the demand for lithium hydroxide which is a key component in lithium ion batteries.
Regional analysis - Asia Pacific dominated the global lithium hydroxide market in 2023, accounting for over 45% of global consumption. China leads the demand on account of its dominance in lithium-ion battery production. North America is expected to be the fastest growing market, growing at a CAGR of over 12% during 2023 - 2030 as the U.S. continues to aggressively push electric vehicle adoption targets.
Key players operating in the lithium hydroxide market are SQM S.A., Albemarle Corporation, Leverton-Clarke Speciality Chemicals., HELM AG, and Ganfeng Lithium Co., Ltd. These players are expanding production capacities to meet the exponential rise in lithium demand. They are also investing in technologies to develop lower cost production processes.
For More Insights, Read: https://www.newswirestats.com/lithium-hydroxide-market-demand-growth-and-regional-outlook-by-2030/
