Lithium Compounds Market - Growth, Trends, and Forecasts (2023 - 2028)

The lithium compounds market is expected to register a CAGR of over 8% during the forecast period.

Key Highlights

• The COVID-19 pandemic substantially impacted the lithium compounds market. Global constraints affected the automobile, building, and ceramic and glass industries. Despite this, the pharmaceutical business saw an increase in demand, keeping the market growing during the pandemic. However, the industries have increased production since 2021, and the market is expected to follow suit throughout the projection period.
• The increased use of batteries, particularly in electric cars, as well as rising demand from the ceramics and glass industries, are propelling the lithium compounds market forward. On the contrary, the high costs of compounds and their replacement by other substitutes are expected to hinder the market growth.
• Nonetheless, the increasing demand for electric vehicles in the market is likely to act as an opportunity for market study. Asia-Pacific represents the largest market for lithium compounds due to massive spending in the construction and automobile industry and will continue to dominate during the forecast period.

Lithium Compounds Market Trends

Growing Demand for Batteries

• Lithium compounds have been widely used in lithium-ion rechargeable battery technology to preserve and save energy. Lithium-ion batteries are used in devices such as mobile phones, cameras, laptop computers, power equipment, and vehicles.
• Lithium-ion batteries play an important part in vehicles, both combustion and electric. Because of their qualities like high energy density, low self-discharge rate, long life cycle, cheap maintenance, fast charging, and low weight, lithium-ion batteries are preferred in the automotive sector. The demand for Ni-Cd batteries is also high, as they are currently used in some hybrid electric vehicles. The sales of and demand for hybrid vehicles in India, Southeast Asia, and South Korea have witnessed decent growth compared to the previous years.
• According to the Bureau of Economic Analysis (BEA), the value added by manufacturing electrical appliances, equipment, and components in the United States in the third quarter of 2022 was around USD 73.8 billion, an increase of approximately 8% over the same time the previous year. The total value added in the first three quarters was close to USD 220 billion.
• Furthermore, the gross output of computer and electronic products manufacturing in the United States was approximately USD 1,300 billion in the first three quarters of 2022. 2022 saw a 7% gain when compared to the same period in 2021 (USD 1,200 billion).
• Meanwhile, the International Energy Agency (IEA) reported in its 'September 2022 Electric Vehicles Outlook' that despite supply chain constraints and the ongoing Covid-19 pandemic, electric car sales reached a record high in 2021. Sales nearly doubled to 6.6 million in comparison to 2020, bringing the total number of electric vehicles on the road to 16.5 million.
• The rising number of electric vehicles and the increasing usage of electronic equipment in developing countries is driving the demand for rechargeable batteries, which may drive the market for lithium batteries through the coming years.

Asia-Pacific to Dominate the Market

• Asia-Pacific is expected to dominate the overall lithium compounds market, owing to the highly developed electronics, automotive, ceramics, and glass sectors in China, India, Japan, and Korea, coupled with the continuous investments in the region to advance the battery technology sector through the years.
• Due to government prohibitions on internal combustion engines and hefty levies on internal combustion vehicles in China, the manufacture of electric and hybrid vehicles increased in China and India over the past several years.
• China has been the highest producer as well as consumer of electric vehicles, covering approximately half the market all around the globe. According to the China Association of Automobile Manufacturers (CAAM), the total production of new energy vehicles (NEVs) in China in 2022 was about 7 million units. This was a whooping increase of close to 97% when compared with the production of vehicles in the year 2021 (3.54 million units).
• India has also been focusing on the electric vehicles market for the country for the past few years. A study by CEEW Centre for Energy Finance recognized a USD 206 billion opportunity for electric vehicles in India by2030, which will necessitate a USD 180 billion investment in vehicle manufacturing and charging infrastructure in the country.
• According to IQVIA's projections, China, the second-largest pharmaceutical spending nation in the world, will increase segment volume by 8% over five years since 2021, while spending will rise by 19%, a slower rate than in prior years but still with an emphasis on extending access to cutting-edge medications.
• Indian pharmaceutical industry is also expected to reach USD 130 billion by 2030, as India Brand Equity Foundation (IBEF) suggested. The country is the largest producer of vaccines worldwide, accounting for ~60% of the total vaccines as of 2021, and ranks third globally for pharmaceutical production by volume.
• According to the statistics presented by the Ministry of Chemicals and Fertilizers, India, major chemicals production climbed by 5.73% to 43.51 lakh tons (4.351 million tons) in 2022-23 (up to July 2022) compared to 41.15 lakh tons (4.115 million tons) in the previous year's similar period.
• The growing need for high-efficiency batteries necessitates advanced technological improvements in lithium compounds. Continuous growth in energy-saving devices, along with the increasing pharmaceuticals and chemicals industry in the region is expected to drive the market for lithium compounds through the coming years.

Lithium Compounds Industry Overview

The lithium compounds market is partially consolidated in nature, with a few major players dominating a significant portion of the market. Some of the major companies are FMC Corporation, SQM SA, Lithium Americas Corp., Albemarle Corporation, and Neometals Ltd.

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