Lithium Market by Product (Carbonates, Hydroxide, and Others), Application (Automotive, Consumer Electronics, Grid Storage, Glass & Ceramics, and Others), and Region (North America, Europe, Asia-Pacific, and LAMEA): Opportunity Analysis and Industry Forecast, 2023-2032

Lithium Overview

Lithium is the least dense solid element and lightest metal. Small levels of lithium, a highly reactive alkali metal, are present in a number of minerals, rocks, and brine sources. It has a low melting point and is very reactive, especially when exposed to water and air. Lithium is the lightest metal, with a density that is approximately half that of water. It is a very good heat and electrical conductor. Brine deposits, where lithium-rich brine is collected from subsurface reservoirs and concentrated through evaporation, account for the majority of the world's lithium output. Hard rock minerals like spodumene and petalite are some important sources of lithium. Australia, Chile, China, and Argentina are the top lithium-producing nations in the world.

Global Lithium Market Analysis

The global lithium market size was $38.4 billion in 2022 and is predicted to grow at a CAGR of 21.6%, by generating a revenue of $266.0 billion by 2032.

COVID-19 Impact on Global Lithium Market

The pandemic caused global supply chains to break down, which had an impact on the lithium market. Due to lockdown procedures, lack of permanent workforce, and transportation issues, numerous lithium mines and processing plants were forced to temporarily close or operate at reduced capacity. As a result, lithium was produced less frequently and was less widely available.

Many businesses and governments concentrated on discovering and securing lithium deposits in order to guarantee a continuous and dependable supply of the metal. Investments in lithium mining projects, exploration initiatives, and initiatives to advance extraction and processing technology were all part of this. These programs attempted to fulfil the growing demand and lessen reliance on a small number of nations that produce lithium.

In the post-pandemic period, however, this pace of production of lithium is expected to increase substantially. Moreover, the demand for lithium from several end-use sectors is anticipated to rise due to restarting of various manufacturing industries.

Electric Vehicle (EV) Adoption to Drive the Market Growth

The growing global use of electric vehicles is one of the main factors driving the lithium industry. Due to their high energy density and rechargeability, lithium-ion batteries are the most common type of battery used in EVs. Major producers of lithium include countries like Australia, Chile, and Argentina. These nations have sizable lithium reserves. The supply chain and market dynamics can be impacted by political stability, trade policies, and resource ownership. Due to continued research and development in battery technology, the lithium market is growing. Lithium-ion batteries are increasingly employed in EVs and energy storage systems, among other things, as a result of advancements in safety, cost, and energy density. Innovations in battery chemistry and technological advancements are further increasing the need for lithium.

Supply Constraints to Restrain Market Growth

Lithium deposits are present all over the planet, but their extraction and processing can be time-consuming and costly. Building new lithium mining projects and increasing production require overcoming challenges linked to regulations and the environment. The entire supply may be constrained, and prices may fluctuate if reliable and sustainable lithium resources are not readily available. Geopolitical dangers may arise from the concentration of lithium reserves in a small number of nations, including Australia, Chile, Argentina, and China. The availability and price of lithium supplies can be impacted by changes in political stability, governmental policy, or trade disputes. Dependence on a small number of nations for lithium can result in unpredictability and disruptions in the supply chain.

Expansion of Lithium Supply to Drive Excellent Opportunities

Lithium companies are growing their businesses and looking into new lithium sources to suit the escalating demand. Lithium extraction from unorthodox sources, such as geothermal brines and clay deposits, is being used to supplement more typical lithium production techniques like mining and brine extraction. This diversification of supply sources will support price stabilisation and guarantee a long-term lithium market. Lithium-ion batteries are also required for energy storage systems, which are crucial for integrating renewable energy sources into the grid and ensuring a consistent supply of electricity. As more renewable energy installations are added and as the demand for energy storage solutions rises, the lithium market will prosper.

Global Lithium Market Share, by Product, 2022

The carbonates sub-segment accounted for the highest share in 2022. The dynamics of the lithium market are also impacted by supply and production limitations. Mineral deposits and brine sources are where lithium is most commonly mined. The lithium supply on a global scale may be impacted by lithium reserve availability, mining laws, and investments in new lithium production facilities. Any supply disruptions have the potential to affect the market as a whole and cause price volatility. A key driver for lithium carbonates is the industry's explosive rise due to electric vehicles. Due to their high energy density and extended lifespan, lithium-ion batteries—which need lithium carbonate as a crucial component—are commonly employed in electric vehicles. The need for lithium carbonates will develop along with the popularity of electric vehicles.

Global Lithium Market Share, by Application, 2022

The consumer electronics sector accounted for the highest market size in 2022. To access new features and better performance, consumers frequently replace or upgrade their consumer electronics equipment. The market's ongoing need for lithium is influenced by replacement and upgrade cycles. Use of smartphones, tablets, and other consumer electronics has expanded along with the growth of e-commerce and people's reliance on digital material. The requirement to sustain continuous use for activities like online shopping, streaming videos, and social media participation is what fuels demand for a longer battery life in these devices. IoT device proliferation and the need for constant connectivity have an impact on lithium demand in consumer electronics. The long-term functionality and wireless communication of Internet of Things (IoT) devices, such as linked appliances, smart home gadgets, and voice assistants, depend on lithium-ion batteries.

Global Lithium Market Share, by Region, 2022

The Asia Pacific lithium market accounted for the highest market share in 2022 Countries in the Asia-Pacific area are working more closely together and forming alliances to ensure a sustainable lithium supply chain. Lithium resource development, production capacity improvement, and a steady supply of lithium are the goals of projects like joint ventures, investment agreements, and research partnerships. In addition to the developed lithium markets in nations like China and Australia, there are also developing lithium markets in other nations in the Asia Pacific area. For instance, nations like Indonesia and Vietnam have been researching potential lithium reserves and creating strategies to enter the lithium market.

Competitive Scenario in the Global Lithium Market

Product development and geographic expansion are the major strategies adopted by the leading players functioning in the highly competitive global lithium market. Energy Renaissance intends to create EV batteries specifically suited for Australian climatic conditions at the country's first lithium-ion battery manufacturing facility, which it will begin constructing in July 2021. These actions should lessen the dependency on battery imports from other nations. They are probably going to motivate battery producers to build EV batteries close to home, which will enhance regional demand possibilities.

Some of the leading lithium market players are Albemarle Corporation, SQM S.A., Ganfeng Lithium Co., Ltd., Tianqi Lithium Corporation, Pilbara Minerals, Livent Corporation, Orocobre Limited Pty Ltd, Lithium Americas Corp, Mineral Resources.