Moving on up
The business of separators, one of the core materials of batteries, is flying high as demand for batteries has climbed. Separators are one of the four main elements that make up a battery, along with anode materials, cathode materials, and electrolytes.
The global separator market is expected to grow from US$3.6 billion in 2020 to US$21.9 billion in 2030, at a compound annual growth rate of 20 percent, according to global market research firm SNE Research. In addition, Korean companies are expected to account for 75 percent of the separator production capacity in North America and Europe in 2030.
SKIET, Korea’s No. 1 separator company, went back to a surplus for the first time in seven quarters in the second quarter of this year, thanks to strong sales of lithium-ion battery separators (LiBS). The outlook is also bright for Korean separator makers. SKIET signed a five-year supply agreement through 2027 with SK. In June, it inked a long-term supply deal (seven years) with a new customer in North America and other regions overseas. But balancing its customer mix heavily lopsided toward SK on is a challenge for SKIET. Industry insiders estimate that SK on accounts for more than half of SKIET’s sales.
LG Chem, a latecomer in the separator industry, also expressed that it is considering expanding its separator business to the United States in a recent conference call. “Under the U.S. Inflation Reduction Act, battery components are required to be 100 percent localized beginning from 2029, so we will confirm investment in the localization of separators within this year,” an LG Chem official said. “We will establish a local supply system for separators in the United States by 2027.”
A Hungarian plant, built through LG Toray Hungary Battery Separator Kft, a joint venture with Japan’s Toray, began producing separator fabrics in May. However, it is still in the early stage with improving yields and has not achieved significant profitability.
“Currently, the separator market is going through an accelerated exit by major battery cell makers from China shortly before and after the implementation of the US IRA bill,” said Jung Won-seok, a researcher at HI Investment & Securities. “Anticipation is expanding that Korean separators will be able to quickly replace Chinese-made separators.”