Lithium Chemicals Market is slated to witness substantial consumption throughout the forecast period 2021-2027. This can be mainly attributed to the increasing demand for lithium-ion batteries in key applications including electric vehicles and consumer electronics. EV adoption has been rising at an unprecedented pace over the past few years, accelerated by environmental concerns, strict regulations, and government incentives on EV purchases. As a result, automakers are ramping up li-ion battery production. For example, in April 2021, German auto giant Volkswagen had expanded the capacity at its Braunschweig facility to more than 600,000 battery systems per year.
The growth of lithium chemicals industry is also influenced by growing consumption in lubricants, polymers, and glass & ceramics. The demand for polymers is rising globally due to their use in virtually every end-use vertical. Meanwhile, the demand for durable, high-performance, and aesthetic glass and ceramic products is increasing led by the ongoing residential and commercial expansion. The expansion of key end-use sectors indicates that the consumption of lithium compounds will grow substantially in the forthcoming years.
The medical sector is anticipated to hold a fair share of the lithium chemicals market through 2027. Lithium finds wide use as a mood stabilizer to treat mood disorders. It is available as both regular and slow-release tablets (lithium carbonate) and as a swallowable liquid (lithium citrate). Compounds of lithium are found to be effective not only for alleviating mood disorders but also against mental conditions such as mania, hypomania, depressive episodes, bipolar disorder, and others. They can also help reduce self-harming or aggressive behavior. The increasing burden of mental health problems will certainly boost the consumption of lithium compounds across the medical sector.
North America lithium chemicals industry size is expected to witness an upward growth trajectory in the next few years, powered by the ongoing EV boom. EV sales have surged exponentially in recent years, led by their increased popularity among consumers and active efforts made by the respective governments. For instance, in August 2021, the U.S. President Joe Biden announced USD 174 billion in federal spending, including USD 100 billion in consumer incentives, to accelerate progress towards making nearly half of all new vehicle sold in 2030 electric. Following the announcement, leading carmakers including Ford, GM, and Chrysler said in a joint statement that they aim to achieve 40-5-% annual EV sales in the country by 2030. The surge in electric vehicle production will certainly benefit the local manufacturers and suppliers of lithium compounds.
Mody Chemi Pharma Ltd., Sichuan Brivo, Albemarle, Talison, and Chengdu Tianqi are among the notable players in the lithium chemicals market. Manufacturers are looking to expand their market presence through strategies such as acquisitions and collaborations. Citing a recent instance, in September 2021, Albemarle Corporation announced that its subsidiary Albemarle Lithium U.K. had completed the acquisition of China’s Guangxi Tianyuan New Energy Materials Co. Ltd. for USD 200 million.
The COVID-19 pandemic and resulting disruptions have had a significant impact on lithium chemicals demand. Temporary suspension of manufacturing activities, construction projects, and auto production due to supply chain problems and workforce shortages is a major factor responsible for the declining product demand. The year 2020 saw numerous automakers temporarily shut down EV production. For example, in the U.S., Tesla, GM, Ford, and FCA had lower vehicle production, including EVs, in March. However, as the COVID situation improves, the lithium chemicals market could witness increasing demand during the projected period 2021-2027.