Lithium Hydroxide Prices Stabilize in Europe as Demand Rises, New Refinery Boosts Supply Chain

Antwerp, Belgium: Lithium Hydroxide prices in Belgium have stabilized in the first week of October. Exporters in China have noted improved demand for Lithium Hydroxide recently and have been offering Lithium Hydroxide at higher prices. Europe is intensifying its lithium mining efforts to reduce reliance on China, which currently dominates its lithium supply. Several new mining projects are expected to launch in the coming years as part of the EU's strategy to secure more lithium for the energy transition, particularly for electric vehicle batteries.

However, weakness persists in the European Lithium Hydroxide market due to deviating EV sales figures. In August 2024, battery-electric vehicle registrations dropped by 43.9% to 92,627 units, with market share falling to 14.4% from 21% last year, mainly due to sharp declines in Germany and France. Despite this, 902,011 BEVs were registered from January to August, representing 12.6% of the market, down slightly from 13.9% in 2023. While Germany's BEV share fell, France, Denmark, the Netherlands, Luxembourg, and Belgium saw growth.

Currently, Europe imports 81% of its lithium salts including Lithium Hydroxide, and lacks sufficient domestic refining capacity, relying heavily on suppliers from Chile and China. To address these supply vulnerabilities, efforts are focused on building robust, resilient, and sustainable value chains. Additionally, there is a push to increase domestic lithium extraction, refining, and recycling, reduce dependency on imports of lithium carbonate and Lithium Hydroxide, and closely monitor potential supply disruptions. As per the latest assessment done by the ChemAnalyst pricing team, Lithium Hydroxide Battery Grade DDP Antwerp settled at USD 11500/MT in the week ending on 4^th October 2024.

In the Belgian market, contrary to popular belief, EV sales continue to surge, with 96,233 new registrations recorded in the first nine months of 2024, surpassing the total for 2023, which stood at 93,180. According to sources, this represents a 45.2% increase in the overall electric vehicle market in Belgium. Additionally, private sales of new EVs have seen a significant rise of 104.5%, jumping from 6,267 to 12,813 units.

In the latest development, AMG Critical Materials N.V. has officially inaugurated its new Lithium Hydroxide refinery in Bitterfeld-Wolfen, Saxony-Anhalt, Germany, operated by AMG Lithium B.V. This facility represents a significant achievement as Europe’s first Lithium Hydroxide refinery and is poised to greatly enhance the region’s battery materials supply chain. With this expansion, AMG could meet up to 14% of Europe’s projected lithium demand for batteries, playing a crucial role in securing the supply of this essential raw material for both Germany and Europe.

The impact of the Chinese market continues in Europe. The first week marked the pre-holiday inventory buildup for downstream material plants, with overall inquiries and purchasing demand showing positive momentum. Alongside a reduction in supply from certain customers, downstream demand continued to improve. Boosted by optimistic market sentiment, lithium chemical smelters broadly increased their prices, leading to a notable surge in spot market prices.

According to the analysts, the prices of Lithium Hydroxide are anticipated to hold steady in the upcoming weeks in the European markets on the back of imports of expensive goods.