Amid the Covid-19 pandemic, the lithium compounds market witnessed a major downfall in the growth and demand owing to the various economic and legal restrictions imposed in countries across the world. The restriction and bans on trade, export, import and other inter-country and inter-state activities affected the lithium compounds market in terms of production, supply-chain management and distribution. The restrictions were in effect for the major part of the year 2020. However, the restrictions were eased out and the bans were lifted during the beginning of the year 2021 when the Covid-19 cases were decreasing. The lithium compounds market is expected to grow by the year end of 2021.
Lithium Compounds Market Segment Analysis By Compound
Lithium carbonate segment held the largest share of 32% in the Lithium compounds market in the year 2020. Lithium carbonate is highly used in the processing of metal oxides. Lithium carbonate is the first lithium compound derived from chain of lithium, which is used as a building block for other lithium derivatives. Lithium carbonate is majorly used in the production of various products such as glass & ceramics, aluminum, pharmaceuticals, Li-ion batteries and others. The increasing application of such products is driving the demand for lithium carbonate segment in the lithium compounds market. Lithium carbonate is also used in the oven glasses to reduce the melting point of silica. This is one of the major reason driving the demand for lithium carbonate in the lithium compounds market.
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Lithium Compounds Market Segment Analysis By Application
Li-ion batteries segment held the largest share of 30% in the Lithium compounds market in the year 2020. The increase in the demand and production of electric vehicles in the present days is one of the factors driving the manufacturing of Li-ion batteries. According to International Energy agency, the global sales of electric cars topped 2.1 million units in 2019 surpassing the global sales of 2018. This eventually boosted the stock to 7.2 million electric cars. Electric cars registered a 40% year-on-year increase in the year 2020 at 2.94 million units. The increase in the sales and production of electric cars is increasing the demand for Li-ion batteries which is further driving the lithium compounds market.
Lithium Compounds Market Segment Analysis By End-Use Industry
Automotive industry held the largest share growing at a CAGR of 8.7% in the Lithium compounds market in the year 2020. The increasing use of lithium carbonate, lithium chloride, lithium hydroxide and lithium chloride in the production of cathodes and anodes in batteries is one of the major factor driving the demand for lithium compounds in the automotive sector. According to International Organization of Motor Vehicle Manufacturers (OICA), even though the automotive industry production declined by 13.77% in the year 2020 due to the global pandemic, the automobile industry is estimated to bounce back on track in the coming days. This is driving the need for automotive parts like batteries and others which is further increasing the growth and demand for lithium compounds market.
Lithium Compounds Market Segment Analysis By Geography
Asia-Pacific region held the largest share of 42% in the Lithium compounds market in the year 2020. The rapid growth of population in countries like India and China coupled with the countries high dependence on end use industries like building & construction, automotive and medical industry is driving the demand for lithium compounds as it is used in various applications of these end-use industries. For instance, according to India Brand Equity Foundation (IBEF), the pharmaceutical industry in India is estimated to be around US$41 billion by the end of 2021. Furthermore, the investments in the pharmaceutical industry in India stood at US$17.5 billion in the year 2020 and the Indian government further announced an incentive scheme in February 2021 which will attract investments of US$2.07 billion into the sector. This will majorly impact the lithium compounds market in the region. Furthermore, according to International trade administration, the production in pharmaceuticals industry in Japan increased by 35.2% to US$84.6 million in the year 2019 from US$62.57 million in the year 2018. This is driving the Asia-Pacific region of the lithium compounds market.
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Lithium Compounds Market Drivers
Increasing Demand from Medical Industry
Lithium carbonate is used in medications in treating maniac-depressive disorders (bipolar disorder). Lithium carbonate is used for stabilizing mood and in reducing extreme behaviors by restoring the balance of neurotransmitters (natural substances in brain). It helps in reducing the severity and frequency of mania. Lithium compound is tested to have reduced the risk of suicide tendencies among mentally-ill patients. According to the latest statistics provided by World Health Organisation (WHO) on depression and suicide in the year 2019, more than 264 million people are affected with depression across the globe and around 800 thousand people commit suicide every year. Suicide was found to be the second leading cause of death in 15-29 years old every year. The increasing mental health awareness and thereby treatment of such illness is increasing the use of lithium carbonate in the production of medicines for such illness. This is further driving the lithium compound market.
The Increasing Production of Glass and Ceramic
The increase in production of glass & ceramic and related products is one of the significant factors driving the demand for lithium concentrate, a type of lithium compound is widely used in the production of glass and ceramics which is further fuelling the growth of the lithium compound market. For instance, according to Glass Alliance Europe, the glass production in Europe reached 37.2 million tonnes, an increase of 1.8% compared to the previous year 2018. Likewise in the US, according to the Bureau of Economic Analysis of US, the total value of glass and glass product manufacturing industry was valued at US$3.83 trillion in the year 2020, an increase of 0.26% from the previous year value. The increase in production of glass and ceramics is driving the demand for lithium concentrate, a lithium compound which is further driving the demand for lithium compound market.
Lithium Compounds Market Challenges
High operational costs and fluctuating price of lithium
The high operational costs involved in the setting up of the production of lithium compounds is one of the major factors restraining the growth of lithium compounds market. The setting up cost and operational costs involved with lithium compound is expensive, because of which the growth of the lithium compounds market is highly restricted. Furthermore, the fluctuating prices of lithium is one of the major restricting factor hindering the growth of the lithium compounds market. According to the data provided by the Trading Economics, the price of lithium carbonate increased by 32.02% in May 2021 as compared to the increase of 19.30% in January 2021. This fluctuation is one of the biggest challenge faced by the lithium compounds market.
Lithium Compounds Market Industry Outlook
Acquisitions and mergers, production expansion, facility expansion collaborations, partnerships, investments, are some of the key strategies adopted by players in the Lithium Compounds Market. Major players in the Lithium Compounds Market Lithium Americas Corp., Albemarle Corporation, Neometals Ltd, FMC Corporation, Sociedad Química y Minera de Chile, Livent Corporation, Tianqi Lithium Industries Inc., Nemaska Lithium Inc., Neo Lithium Corporation, Millennial Lithium Corporation and Galaxy Resources Limited among others.
On 25 September 2020, Contemporary Amperex Technology Co. Limited (CATL), a battery manufacturer and technology company known for its lithium-ion batteries for electric vehicles & energy storage systems and Shenzhen KSTAR Science & Technology partnered for constructing a lithium-ion battery manufacturing facility in Fuji, China. The companies invested about US$150 million in the factory in China which occupies 1GWh of annual production capacity and will make lithium-ion battery packs as well as integrated products for solar-plus-storage.
Asia-Pacific market held the largest share in the lithium compounds market owing to highly developed electronics industry and battery technology segments in countries like India, China and Japan.
The increasing production of glass & ceramic and related products is one of the major factors driving the lithium compounds market as lithium concentrate, a type of lithium compound is used in the production of glass and ceramics.
The growing demand for battery-saving devices owing to the technological advancement and growth is driving the demand for lithium compounds market, as lithium carbonate is widely used in production of cathodes in batteries.
Amid the Covid-19 pandemic, the Lithium compounds market witnessed a major downfall due to the various restrictions laid down by countries across the globe.
A. Lithium Ion Battery Cathode Material Market
B. Lithium Iron Phosphate (LFP) Batteries Market
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