Major South Korean cathode makers have received orders worth about 47.17 trillion won (about $34.18 billion) year-to-April. 14., marking an increase of over 3 trillion won (about $2.17 billion) compared to last year’s period. Cathodes are crucial materials that account for 40% of the automotive battery cost. The associated market remains upward despite a general decline in the electric vehicle sector.
According to the Repository of Korea’s Corporate Filings’ Data Analysis, Retrieval and Transfer System (DART), on Apr. 15., the total amount of supply contracts signed by major domestic cathode makers so far this year was around 47.17 trillion won (about $34.18 billion).
With the selling price of the materials dropping to half its peak in the first half of last year, largely attributed to the decrease in the price of raw materials such as lithium, it’s anticipated that cathode companies will deliver significantly higher volumes than last year.
L&F, a leading South Korean company in the cathode material business, secured the largest order backlog at the beginning of this year. On Apr. 11, L&F announced that it signed a contract with a European battery company to supply high-nickel cathode materials worth 9.238 trillion won (about $6.67 billion) for six years from next year. The company didn’t disclose the counterparty, but industry insiders believed it to be Northvolt, a Swedish battery developer and manufacturer.
Northvolt is Europe’s largest secondary battery company. The company built a 16-gigawatt-hour (GWh) battery cell plant in Skelleftea, Sweden, and began mass production in late 2021. It is currently supplying Volkswagen and others. Northvolt has been rapidly expanding its business, breaking ground last month on a 60GWh battery factory in Heide, Schleswig-Holstein, northern Germany.
In its filing on Mar. 25, L&F announced that it signed a 13.19 trillion won (about $9.52 billion) contract with SK On, a South Korean electric vehicle battery maker, to supply high-nickel cathode for seven years. This is the second trillion-won-worth supply agreement between the two companies, the first being in 2021 (1.2 trillion won, $866 million). Most cathode materials will be used in automotive batteries for Hyundai Motor Company’s vehicles.
In February of this year, LG Chem, South Korea’s largest petrochemical company, signed a 24.7492 trillion won (about $17.86 billion) deal to supply cathode materials to General Motors (GM), an American multinational automotive manufacturing company in the U.S., through 2035. According to LG Chem, the volume of cathode supplied by the company is about 500,000 tonnes. This is enough to make batteries for about 5 million electric vehicles that can travel 500 kilometers on a full charge.
LG Chem will start the supply from 2026, when the plant in Tennessee, US, is fully operational. “The NCMA (nickel-cobalt-manganese-aluminum) cathode materials produced at the Tennessee plant will be mainly used in Ultium Cells, a joint venture between LG Energy Solutions and GM,” said an LG Chem official.
