Battery Supply Chain Reshaping Can be Opportunity for South Korea

The Institute for International Trade of the Korea International Trade Association said in its report on Sept. 7 that the United States’ and the European Union’s EV battery supply chain reorganization plans can be both a threat and an opportunity for South Korean companies in the industry.

According to Bloomberg New Energy Finance, China currently accounts for 53 percent, 78 percent, 66 percent and 62 percent of the global positive electrode material, negative electrode material, separator and electrolyte production, respectively. Even the combined market shares of South Korea and Japan are lower than those of China and the United States and the European Union have little production infrastructure in the industry.

In addition, the EV market and the battery cell industry of China are the largest in the world and batteries from China account for 43.4 percent and 25.7 percent of the total battery imports of the United States and the European Union, respectively.

“China, South Korea and Japan are currently leading the global battery industry and the reliance of the United States and the European Union is likely to continue for a while,” the institute said in the report, adding, “South Korean companies have been in partnerships with European and U.S. automakers and this means they can join the supply chain reorganization plans with relative ease.”

The institute pointed out that what is important now is stability in terms of raw material procurement. “South Korea’s lithium hydroxide import volume and value have increased 2.3-fold and 4.6-fold since 2012, adding to the cost burden of domestic battery manufacturers,” it explained, adding, “When it comes to cobalt, Congo accounts for 78 percent of the total mining volume and China accounts for 72 percent of processing.” It also said that 61 percent of lithium ore is processed in China whereas 39 percent and 26 percent of it are mined in Australia and Chile, respectively.