SEOUL, Sept. 6 (Korea Bizwire) — South Korea’s exports of cathode materials have experienced significant growth, primarily driven by the rapid expansion of the secondary battery industry, especially in the electric vehicle sector.
However, a substantial portion of the earnings from South Korea’s cathode material exports are flowing back to China, which supplies crucial ingredient compounds such as lithium and precursors.
Against this backdrop, there have been suggestions that South Korea should work toward self-sufficiency in the supply of these ingredient compounds.
According to the report titled ‘The Impact of the U.S. IRA Enforcement Guidelines on South Korea’s Battery Supply Network,’ published on Tuesday by the Korea International Trade Association, the nation’s exports of secondary battery cathode materials amounted to US$74.9 billion in the first half of this year, up 66 percent from a year ago.
Cathode material shipments registered an average annual growth rate of 77.7 percent during the period from 2019 to 2022.
The recent surge in cathode material shipments can be mainly attributed to major domestic battery companies such as LG Energy Solution establishing battery plants in Europe and the U.S. amid the global reshuffle of supply networks.
However, South Korea’s trade balance with China is deteriorating due to a trade structure in which an increase in cathode material exports corresponds to an increase in imports of lithium and precursors from China.
In the first half of this year, the nation’s trade deficits in lithium and precursor materials amounted to $5.09 billion and $2.17 billion, respectively.
Of the total, the nation’s trade deficits with China accounted for $3 billion and $2.11 billion, respectively.
Lina Jang (firstname.lastname@example.org)