February 24, 2024
Lithium Hydroxide Market

Growing Battery Market to Boost the Growth of the Global Lithium Hydroxide Market

Market Overview:

Lithium hydroxide is an inorganic compound that is primarily used as a raw material in the manufacturing of lithium-ion batteries. It is used as a cathode material in lithium-ion batteries which are used in electric vehicles, consumer electronics, and energy storage applications. Lithium hydroxide offers advantages such as longer battery life, faster charging capabilities, and extended power capacity. The growing demand for EVs and need for energy storage is fueling the demand for lithium-ion batteries which in turn is driving the growth of the lithium hydroxide market.

The global 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:

One of the key trends in the lithium hydroxide market is the growing demand for electric vehicles. Stringent emission regulations by various governments globally are forcing automakers to shift focus towards electric mobility. Electric vehicles require large lithium-ion batteries which use lithium hydroxide as a key raw material. Moreover, various government incentives and subsidies on electric vehicles are encouraging customers to opt for EVs over conventional vehicles which is increasing lithium hydroxide consumption. Furthermore, the energy storage sector is growing significantly which is propelling the demand for lithium hydroxide as it is used in batteries for storing renewable energy.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate. Setting up lithium hydroxide production requires significant capital investment and access to lithium ore reserves which act as barriers.

Bargaining power of buyers: The bargaining power of buyers is high as lithium hydroxide is used as a raw material by battery manufacturers. Buyers can negotiate on price and demand quality standards.

Bargaining power of suppliers: The bargaining power of suppliers is also high given the limited number of lithium producers and the need for long term contracts to secure supply. Suppliers can influence prices.

Threat of new substitutes: The threat of substitutes is low as lithium hydroxide has established its use in lithium-ion batteries and there are no close substitutes that can match its properties.

Competitive rivalry: The competitive rivalry is high among the key global players to gain greater market share. Players compete on pricing, product differentiation, and expansion to new markets.

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 demand for lithium-ion batteries from electric vehicles industry. Geographically, Asia Pacific region dominates the global market and is expected to maintain its leading position during the forecast period owing to the presence of key lithium producers and battery manufacturers in countries like China.

Regional analysis reveals that China dominates the global lithium hydroxide market. The country accounted for over 30% of the total lithium hydroxide demand in 2023. This can be attributed to presence of large number of lithium reserve mines and battery manufacturing units in the country. North America region is expected to witness fastest growth during forecast years mainly driven by rising sales of electric vehicles in USA.

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. In order to gain competitive edge, the players have adopted strategies such as expansion of production facilities and long term contracts with end use industries.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it