Import Diversification Needed
South Korean cathode material suppliers’ global market share is rising fast, but their reliance on raw materials imported from China is still very high. For example, their lithium hydroxide imports from China amounted to US$2.5 billion for the first 10 months of this year, up more than 600 percent year on year. More than 86 percent of lithium hydroxide they use is from China and the figure amounts to 99.9 percent when it comes to precursors for use in NCA battery cathode materials.
According to market research firms, China’s current global market shares in lithium, cobalt, nickel and manganese mining are 13, 1, 18 and 8 percent, respectively. Those minerals essential for EV batteries are buried mainly in Latin America and Africa. When it comes to smelting, the respective shares of China amount to 44, 75, 69 and 95 percent. This is because China is home to the world’s largest number of smelting facilities.
Under the circumstances, the South Korean suppliers are trying to reduce their reliance on China, with the full implementation of the U.S. Inflation Reduction Act around the corner. The act is to limit the use of EV battery minerals supplied from certain countries, including China. EcoPro BM and POSCO Chemical are currently building cathode material plants in Quebec in order to respond to the act and diversify their procurement.
Experts point out that South Korea needs to benchmark the rechargeable battery industry policies of Finland, whose mineral reserves are close to zero but shares are continuing to rise in the nickel sulfate and lithium hydroxide smelting markets.