Lithium Hydroxide market - Forecasts from 2023 to 2028

The lithium hydroxide market was valued at US$5.111 billion in 2021.

Lithium hydroxide (LiOH) is an inorganic compound comprising the alkali metal lithium and the hydroxide anion. One of the primary uses of lithium hydroxide is in producing lithium-based batteries, which are used in a wide range of applications, including electric vehicles, smartphones, and laptop computers. Lithium hydroxide is used as a raw material for the cathodes of these batteries, where it reacts with other materials to form a stable, high-energy compound that can store electrical energy. Lithium hydroxide also has several other industrial applications. It is used as a corrosion inhibitor in some industrial processes and in producing lubricants and greases. Additionally, lithium hydroxide is used in the production of ceramics, which is used as a sintering aid to help create strong, dense materials.

While lithium hydroxide has several important uses, it is also important to note that it can be toxic if not handled properly. Inhaling lithium hydroxide dust or fumes can cause respiratory irritation and other health effects, and contact with the skin can cause irritation and burns. As such, following proper safety precautions when handling lithium hydroxide is important.

The lithium hydroxide market is driven by the rising number of electric vehicles and the growing requirement for power tools utilizing lithium hydroxide NCA (nickel- cobalt-aluminum) cathode.

• Rising demand for electric vehicles

Lithium-ion batteries are the primary energy storage technology used in electric vehicles, and lithium hydroxide is a key raw material producing these batteries. As the demand for electric vehicles continues to increase, the demand for lithium hydroxide is also expected to rise. According to International Energy Agency (IEA), electric vehicle sales increased by almost 121% from 2020 to 2021. As the demand for electric vehicles increases, the demand for lithium-ion batteries is also expected to rise. Lithium-ion batteries are preferred over other types of batteries due to their high energy density, longer lifespan, and faster charging times. Lithium hydroxide is a key raw material for the production of lithium-ion batteries, and its demand is expected to grow in tandem with the increasing demand for electric vehicles.

• Rising requirement for power tools utilizing lithium hydroxide NCA (nickel-cobalt-aluminum) cathode

NCA cathode technology is commonly used in high-performance lithium-ion batteries, known for their high energy density, longer lifespan, and fast charging capabilities. Power tools, such as drills, saws, and grinders, require high-performance lithium-ion batteries to provide the necessary power and runtime for professional use. NCA cathode technology is well-suited for power tools because it offers high power output, long cycle life, and superior performance in high-temperature environments. The demand for power tools that use NCA cathodes has been increasing in recent years, driven by the growth in the construction and manufacturing industries. The construction industry, in particular, has been experiencing significant growth globally as new infrastructure projects are being undertaken and existing infrastructure is being upgraded.

Market Developments:

• In February 2023,Tianqi Lithium, a Chinese lithium company that is engaged in the exploration, production, and sale of lithium products, commenced its lithium hydroxide production base project in the Zhangjiagang Free Trade Zone. Tianqi Lithium has a battery-grade lithium carbonate capacity of 20,000 metric tons in Zhangjiagang, Jiangsu Province.
• In October 2022,Rock Tech Lithium, a Canadian-based lithium mining company, entered into a definitive supply agreement with Mercedes-Benz AG for the supply of an average of 10,000 tons of battery-grade lithium hydroxide per year over a five-year term, with an estimated sales volume of approximately C$2 billion or €1.5 billion. The Supply Agreement anticipates an annual amount of lithium hydroxide to be delivered, enough to equip around 150,000 high-quality, high-performance batteries for electric cars manufactured by Mercedes-Benz. Additionally, the parties collaborated on developing a plan to produce lithium hydroxide in a manner that is carbon neutral by 2030.

Based on application, the lithium hydroxide market is expected to witness positive growth in the batteries segment.

The batteries application is a major driver of the lithium hydroxide market. With the increasing demand for electric vehicles, consumer electronics, and energy storage systems, the need for lithium hydroxide is expected to rise significantly. Lithium hydroxide is a key component in producing lithium-ion batteries, which are used in electric vehicles, smartphones, laptops, and other electronic devices. The growing popularity of these devices has led to a surge in demand for lithium hydroxide. Furthermore, the increasing use of renewable energy sources such as wind and solar power has increased the demand for energy storage systems, which also use lithium-ion batteries. These systems are used to store excess energy generated during peak hours and release it during times of high demand. As a result, the need for lithium hydroxide in energy storage systems is expected to increase in the coming years.

Asia Pacific accounted for a significant share of the global lithium hydroxide market.

Based on geography, the lithium hydroxide market is segmented into North America, South America, Europe, Middle East and Africa, and Asia Pacific. The Asia Pacific region is one of the largest markets for lithium hydroxide, accounting for a significant share of the global demand. The region's dominance is mainly due to the growing demand for lithium-ion batteries, driven by the increasing adoption of electric vehicles and the development of renewable energy systems. The Asia Pacific region is also one of the largest markets for consumer electronics, such as smartphones, laptops, and tablets, which use lithium-ion batteries. The increasing demand for these devices is driving the need for lithium hydroxide.

 

Market Segmentation:

By Application

• Lubricating Greases
• Purification
• Batteries
• Glass & Ceramics
• Others

By End-User Industry

• Transportation
• Automotive
• Marine
• Aerospace
• Electrical & Electronics
• Others

By Geography

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• United Kingdom
• Spain
• Others
• Middle East And Africa
• Saudi Arabia
• UAE
• Israel
• Others
• Asia Pacific
• China
• India
• South Korea
• Indonesia
• Thailand
• Taiwan
• Others