South Korean EV Battery Makers Paying Increasing Attention to Precursor
- By Michael Herh
- April 12, 2021, 11:23
Korea's reliance on Chinese NCM precursors has topped 90 percent.The Korea International Trade Association announced on April 11 that South Korea imported 27,347 tons of nickel-cobalt-manganese (NCM) oxide precursors in January and February this year, including 92.2 percent imported from China, and the ratio increased from 57.6 percent in 2018 to 88.5 percent in 2019 and then to 89.1 percent in 2020 before exceeding 90 percent in the first two months of this year.
The precursor is a key component of the positive electrode material that determines the performance of an EV battery. It is made by mixing nickel, cobalt and manganese at a certain ratio. The positive electrode material is made when the precursor is mixed with lithium. The positive electrode material accounts for approximately 40 percent of the production cost of a non-small battery and the precursor accounts for up to 80 percent of the cost of the positive electrode material.
At present, South Korean EV battery manufacturers are making a lot of efforts to domestically procure the four key components of positive and negative electrode materials, electrolyte and separator. However, they have not been that interested in precursors and this is because domestic precursor procurement is not that lucrative in view of the price and labor cost.
Another important consideration is the supply of nickel, cobalt and manganese, which requires mines and is another obstacle to direct procurement. At present, the precursor production volume vis-à-vis the domestic precursor demand stands at 30 percent or so. Under the circumstances, South Korean companies had to increase their imports from China with the EV battery demand spiking.
Now, however, they are focusing more and more on domestic precursor supply. This is because the Chinese government may weaponize the item while increasingly concentrating on the growth of the EV industry of China. The efforts are being led by LG Chem and POSCO Chemical. They recently formed partnerships with Huayou Cobalt for a more stable precursor supply.
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