China’s move to control exports of graphite, a key raw material for secondary batteries, beginning from the end of the year has put the Korean battery industry on alert. The Korean industry is more than 90 percent dependent on China for graphite. This means that it is a real challenge for the industry to diversify graphite import sources right away.
According to industry sources on Oct. 23, the Chinese government decided to include three types of highly sensitive graphite, a key raw material used to make anode materials for secondary batteries, in its export control list on Oct. 20. The export controls will take effect beginning on Dec. 1.
The export control does not mean that items on the list will not be exported in the future. However, since companies that want to import graphite will have to get permission from the Chinese government starting December, they may not be able to import as much graphite as they want.
Among Korean companies, POSCO Future M may have trouble importing graphite from China for a while due to the export controls. POSCO Future M produces anode materials using graphite imported from China and supplies them to Korea’s three major battery makers -- LG Energy Solution, Samsung SDI, and SK on.
However, the company’s graphite stockpile is at an adequate level. There is about a month until the graphite export control comes into effect, so the company plans to respond to the situation by increasing its graphite stockpile as much as possible and also securing graphite from Africa.
In addition, the focus of the market for anode materials for batteries is shifting from natural graphite to artificial graphite, which could be advantageous for POSCO Future M, which has completed the vertical integration of artificial graphite anode materials.
Through its subsidiary PMC Tech, which was established in 2012, POSCO Future M directly produces bedded coke, a raw material for artificial graphite anode materials, and is not affected by China’s natural graphite export control.
POSCO Future M plans to ramp up its production scale to 182,000 tons of natural graphite, 153,000 tons of synthetic graphite, and 25,000 tons of silicon carbon composite (Si-C) in 2030 from 74,000 tons of natural graphite, and 8,000 tons of synthetic graphite in 2022.
Next year, POSCO Future M will expand production of synthetic graphite anode materials to 18,000 tons, more than twice as much as this year’s, and scale up production of synthetic graphite anode materials to more than 58,000 tons in 2026 by expanding its plant. The company may decide to expand its graphite anode material production in earnest after monitoring the situation of China’s graphite export control.
Industry observers believe that China’s graphite export control may also accelerate the development of silicon anode materials, which could be a game-changer, with long driving mileage and short charging time. This is because increasing silicon content will naturally address the problem of China’s graphite supply chain monopoly. POSCO Group will rename Tera Technos, which it acquired last year, “POSCO Silicon Solution,” and promote the development of silicon anode materials.
LG Chem is developing technology for pure silicon anode materials, which consist of silicon 100 percent. Since silicon holds more lithium ions than graphite, it has the disadvantage of being bulky, but pure silicon anode materials compensate for this disadvantage and improve batteries’ performances.
SKC announced its entry into the silicon anode material market in 2021 with a total investment of US$80 million in U.K.-based Nexion. The company plans to start pilot production of silicon anode materials and finalize a plan for mass production of them within this year.