Taking the Shine off a Big Player
Even though South Korea is considered a lithium-ion battery powerhouse, the nation is being relegated by China and Japan in the markets of main core parts and materials such as cathodes, anodes, electrolytes and separators. With competition intensifying among battery companies due to new demand for lithium-ion batteries such as those for electric cars, there is growing concern that Korea will be a backward country in the battery industry unless the nation secures competitiveness in parts and materials for batteries.
According to the Japanese market researcher Yano Economic Research Institute on November 22, Korea's share in the markets of four major components and materials for lithium ion batteries plunged compared with those of China and Japan.
By major component, Korea accounted for 8.3% of the cathode material market in terms of quantity last year. Its market share which had stood at 11% fell 3.3 percentage points in two years. On the contrary, China's market share shot up from 53.3% to 67.7% during the same span. Japan’s market share dropped from 25% to 13.6%, but was higher than Korea’s.
Korea's share in the electrolyte market also dipped from 6.8% in 2014 to 4.5% last year. China and Japan accounted for 75% and 20.6% of the market, respectively. Korea chalked up its only double-digit share of 10.5% in the separator market as Korea had SK Innovation, the world's second-largest maker of separators. But this percentage was also 1.4 percentage points down from 11.9% in 2014.
Korea’s share in the anode material market rose from 1.9% in 2014 to 3.0% last year but there is not having its presence felt in the market. "SK Innovation started supplying to CATL, a Chinese battery maker late last year but other parts are mainly supplied by Chinese companies," the Yano Economic Research Institute said.
In fact, major Korean battery makers such as Samsung SDI and LG Chem are known to procure considerable quantities of parts and materials from foreign countries. According to statistics of various market research companies, market shares of Korean batteries such as those of Samsung SDI and LG Chem accounted for about 40% in the small-sized battery market and about 30% in the mid- and large-sized battery market in Korea, so there is no way to procure materials in Korea.
Korea has a few internationally recognized manufacturers of battery parts and materials including SK Innovation, Ecopro, and L&F.
Meanwhile, the size of the combined world market of the four major parts and materials for lithium-ion batteries grew 140.1% year-on-year to US$ 9,877.45 million last year, the Yano Economic Research Institute said. The institute forecast that the size would reach US$ 13 billion this year.