Data from China’s General Administration of Customs on Thursday showed that the country’s export of precursors for nickel, cobalt and manganese (NCM) cathode from January to November was 81,649 metric tonnes.
This is a rise of 37.2% from the same time period a year ago. Export of precursors for nickel, cobalt and manganese NCA) was 6,868 metric tonnes, an increase of 1.4% over the same time period.
The increase in export is thanks to the three South Korea battery makers Samsung SDI, LG Energy Solution and SK Innovation. Gao Gong Industry Institute (GGII) said the expanded supply of electric vehicle batteries by the three firms increased China’s export of precursors.
NCM and NCA cathodes are used mainly by South Korean battery makers.
According to QY Research, China accounted for 75.8% of precursor production in 2020. South Korea ranked second with 13.9% and Japan 9.7%. However, in terms of precursor consumption, China accounted for 42.4% followed by South Korea’s 41.5%. South Korea’s production is dwarfed by its consumption rate.
It is unlikely that South Korean battery makers will be able to reduce their reliance on imports from China for precursors. LG Chem is planning to build cathode factories in Gumi and Cheongju but there is no precursor line planned there. Posco Chemical is also operating a joint venture with Huayou Cobalt for its precursors in China.
However, EcoPro BM, L&F and Cosmo AM&T are planning to expand their cathode and precursors line. South Korea production rate for the two materials is expected to double by 2023.
Nickel sulfate, used to make precursors, was easier to procure in China, a person familiar with the matter said, and South Korean companies will need to find was to procure that raw material to reduce reliance on China.