Raw Material Shortages Likely to Deepen
LG Energy Solution, SK Innovation and Samsung SDI recently announced their plans for electric vehicle battery material procurement and development in order to overcome the ongoing undersupply and improve their technologies at the same time.
SK Innovation announced on July 1 that it would increase its lithium-ion battery separator production capacity from 1.4 billion square meters to 2.1 billion square meters by 2023 and to 4 billion square meters by 2025.
A separator is one of the most important components of a rechargeable battery and the former accounts for 15 percent to 20 percent of the cost of the latter. At present, the global separator market is being led by SKIET, Toray, Asahi Kasei and Yunnan Energy New Material. The SKIET stock price jumped 51.3 percent in July this year alone and the current market cap of the company is over 16 trillion won.
These days, SK Group as a whole is making intensive efforts for battery material procurement, too. For instance, SK Nexilis is expanding its copper foil manufacturing facilities at a rapid pace and SK Inc. made an additional investment of 100 billion won in Chinese copper foil manufacturer Wason last month, when SK Materials announced that it would enter the electric vehicle battery material industry by setting up a joint venture with U.S. silicon anode material developer Group14 Technologies.
LG Chem announced on July 29 that it would acquire LG Electronics’ separator business unit for 525 billion won. LG Chem is planning to expand the unit by utilizing its advanced coating technologies and so on. It is currently aiming to become the largest battery material company in the world. It is planning to invest six trillion won for four years to come and the investment will be concentrated on the development of cathode materials, separators, anode binders, thermal adhesives and carbon nanotubes. The company is going to build a cathode material plant with an annual production capacity of 60,000 tons in South Korea so that its cathode material production capacity can increase from 40,000 tons to 260,000 tons from last year to 2026.
Last month, Samsung SDI transferred its cathode material manufacturing equipment to its subsidiary STM for a higher level of manufacturing and management efficiency. STM is going to increase its capital by 150 billion won by issuing new shares and Samsung SDI will participate in the capital increase. The purpose of the capital increase is to expand manufacturing facilities and supply more cathode materials to Samsung SDI.
Samsung SDI and EcoPro BM set up their joint venture EcoPro EM last year and the first plant of EcoPro EM has been under construction since November last year. High-nickel cathode materials will be exclusively supplied from the plant to Samsung SDI once the construction is completed.
South Korean battery material suppliers are increasing their investment as well. POSCO Chemical is going to build a cathode material plant with an annual production capacity of 60,000 tons in South Korea and approximately 600 billion won will be invested to that end starting from next year. The new plant will increase the company’s domestic production capacity to 160,000 tons, which can be supplied to 1.8 million 60 kWh electric vehicles. In addition, the company will make investments in the United States, Europe and China in order to increase its overseas production capacity to 110,000 tons.
“In the global electric vehicle battery market, demand is likely to exceed supply next year and raw material shortages are likely to accelerate with time,” market research firm SNE Research pointed out, adding, “In the meantime, the global lithium-ion battery material market is expected to grow from US$21.3 billion to US$123.2 billion from 2020 to 2030.”