The market for lithium hydroxide is expected to grow at a CAGR of over 10% during the forecast period. Major factors driving the market studied are the growing demand for electric vehicles that use lithium batteries and increasing demand for power tools that use lithium hydroxide NCA cathode. However, rising concern regarding the toxicity of lithium hydroxide is expected to restrain the growth of the market.
- The application of batteries dominated the market globally, and it is expected to grow during the forecast period owing to the increasing demand for EVs.
- The growing industrialization in Asia-Pacific is expected to drive the demand for power tools, which, in turn, is expected to increase the demand for lithium hydroxide as the power tools use lithium hydroxide NCA cathode.
- North America dominated the market across the world with the largest consumption from the countries followed by Europe and Asia-pacific.
Key Market Trends
Battery Application Segment to Dominate the Market
- One of the major applications of lithium hydroxide is in making cathodes for rechargeable batteries, which are used in electric vehicles. Lithium hydroxide is the most preferred among all the lithium compounds, as they have extreme electrochemical potential and low density.
- The generous subsidies for electric vehicles and stringent regulations regarding the usage of conventional vehicles by the government are some of the key factors that are driving the growth of electric vehicle production in countries, like China, that occupies the majority share of the global electric vehicle market.
- The battery application segment of the global lithium hydroxide market is the key application segment. It is widely used in the manufacture of cathode materials for lithium-ion batteries.
- Lithium batteries can be categorized into two segments, namely, disposable and rechargeable. Disposable lithium batteries use lithium in the metallic form, as an anode. These batteries have a long life (high charge density) compared to other standard batteries. These batteries find applications in critical devices with long life, such as pacemakers and other electronic medical devices, which are implanted for many years.
- Battery applications are moving toward larger power requirements and lesser costs, which mean that advancements in lithium-ion battery technology will be essential to meet consumer demand. As the industry pursues more powerful and inexpensive batteries, step changes in technology are still being pursued. Researchers are investigating substitutes for the anode material, to increase the charge capacity. Few of the latest battery technologies are: lithium-sulfur, lithium-air, and lithium oxygen.
- These growing R&D activities to improve the lithium-ion battery systems are expected to offer numerous opportunities, and fuel the growth of the market in the near future.
Asia-Pacific Region to Dominate the Market
- Asia-Pacific region dominated the global market share. China has been both the leading producer and market for Li-ion batteries. South Korea and Japan also have a high demand for Li-ion batteries.
- China holds around 7% of the global lithium reserves, estimated at a value of 1,000 Kilo Mt in 2018. China accounts for 10% of the global lithium production capacity accounting for 8 kt, in 2018. Abundant availability of resources, such as brine, spodumene and other lithium deposits, accounts for a significant amount of the global resources which hold 30.03 Mt LCE.
- China has substantial lithium resources in the form of brine, spodumene, and lepidolite. China has salt lakes in Qinghai province, spodumene resources mainly in Xinjiang and Sichuan province and lepidolite in Jiangxi province.
- Global investment in the battery supply chain and the need for cheaper batteries are driven by the emergence of the Electric Vehicle (EV). This growing market has been pioneered by Tesla in recent years, but the larger catalyst for global mass-market uptake of EV technology in China, where government subsidies are in place for both passenger EV vehicles and commercial EV’s (buses and small trucks).
- The rise in urbanization is expected to boost the demand for technically advanced devices, due to the benefits provided by the devices. This is expected to, consequently, lead to a growth in demand for lithium-ion batteries in the region. With growing industrialization in countries such as China and India demand for power tools that use lithium-ion batteries is also expected to increase. This, in turn, is expected to boost the demand for lithium hydroxide market.
The lithium hydroxide market is consolidated with the top five players accounting for a major share of the market. The major companies include SQM S.A., Albemarle Corporation, Leverton-Clarke Speciality Chemicals., HELM AG, and Ganfeng Lithium Co., Ltd. among others.
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