European Lithium Hydroxide Market Faces Challenges Amidst Electric Vehicle Slowdown

Antwerp, Belgium: The European Lithium Hydroxide market exhibited instability in April 2024 due to dampened consumer demand. However, prices have somewhat stabilized in recent sessions. Demand for Lithium Hydroxide from the downstream lithium-ion battery sector remained at a moderate level. Meanwhile, in South American nations such as Chile and Argentina, sellers have continued to reduce their quoted prices for Lithium Hydroxide in response to an oversupply situation. As of April 2024, the evaluated prices of Lithium Hydroxide DDP Antwerp stood at USD 14,700 per tonne.

Lithium Hydroxide producers are continuously increasing their production levels, anticipating a rise in the import volume of Lithium Hydroxide from overseas in April compared to March. This suggests an overall trend of supply recovery. In the near future, there hasn't been any notable change in sentiment within the Lithium Hydroxide market, leading to limited liquidity in spot market transactions, especially during times of low prices.

In March, new car sales in Europe experienced a 2.8% decline as automakers like Volkswagen Group and Stellantis grappled with softer demand, particularly for electric vehicles. Sales of battery electric cars dropped by 11%, with consumers in Germany, Sweden, and Norway showing reduced interest. This decline, partly attributed to the timing of Easter, marks the second drop in four months and highlights the challenges automakers face amidst factors that have also impacted the Lithium Hydroxide market, such as higher interest rates, sluggish economic growth, and the gradual phase-out of EV subsidies aimed at stimulating demand.

Automakers such as VW, Mercedes-Benz, and Tesla have reported decreased EV sales in the first quarter. This trend is prompting some traditional manufacturers to reconsider their timelines for phasing out combustion engines, while others are revising their EV targets. In February, Mercedes revised its sales forecast, anticipating that BEVs will constitute less than half of its sales for a longer period than initially expected. The slowdown's impact has been most pronounced at Tesla, which announced plans to reduce its global workforce by over 10%. In Italy, EV sales declined by 34% last month as customers awaited potential new subsidies under government consideration. Germany also witnessed a 29% slump in EV sales, despite efforts by manufacturers like VW to introduce their rebates to offset the country's subsidy cuts.

While an array of new BEVs attracted more buyers in markets like France and the U.K., inadequate charging infrastructure continues to hinder broader adoption, eventually impacting the Lithium Hydroxide market. Some consumers are turning to models with both battery and combustion engine options, as sales of plug-in hybrid vehicles rose by 0.7% last month, surpassing not only fully electric cars but also gasoline-powered models.

According to the ChemAnalyst database, the prices of Lithium Hydroxide are anticipated to hold steady in the upcoming weeks on the back of improved electric vehicle sales and increased domestic consumption.