Exports of cathode materials, one of the core materials for electric vehicle batteries, are surging. But experts have pointed out that much of the money that Korean companies make by exporting them ends up going to China as they import core raw material compounds such as lithium and precursors to make cathode materials.
Korea’s exports of cathode materials for secondary batteries totaled US$7.49 billion in the first half of this year, up 66 percent from the same period of 2022, the Korea International Trade Association (KITA) said in a report on the impacts of the U.S. Inflation Reduction Act (IRA)’s implementation guidelines on Korea’s battery supply chain on Sept. 5. Korea’s cathode material exports showed a steep increase of 77.7 percent on average from 2019 to 2022.
This is attributed to exports from major Korean battery makers such as LG Energy Solution, which sent cathode materials to their factories in Europe and the United States.
Korea has a trade structure where an increase in cathode exports pushes up imports of lithium and precursors. Accordingly, Korea’s trade balance with China is also deteriorating as Korea relies heavily on China for lithium and precursors. In the first half of this year, Korea’s trade deficit in lithium and precursor trade reached US$5.09 billion and US$2.17 billion, respectively, of which its trade deficits with China alone came in at US$3 billion and US$2.11 billion, respectively.
Korea marked 59 percent of its total lithium trade deficit and 97 percent of its total precursor trade deficit with China. This means that about 88 percent, or US$5.11 billion of Korea’s US$5.81 billion trade surplus in cathode material exports in the first half of the year, went to China for Korea’s purchases of lithium and precursors.
Since 2022, China’s imports of compounds for making secondary batteries have exploded, significantly contributing to the deterioration of Korea’s overall balance of payments with China. In the case of lithium hydroxide, a lithium compound used to make ternary cathode materials by being added to precursors containing nickel, cobalt, and manganese, Korea’s trade deficit with China jumped from US$550 million in 2021 to US$3.21 billion in 2022.
The deficit also reached US$3.02 billion during the first half of this year. At this rate, Korea is expected to have a deficit of US$6 billion in trade of lithium hydroxide alone with China this year.
www.businesskorea.co.kr
Korea’s exports of cathode materials for secondary batteries totaled US$7.49 billion in the first half of this year, up 66 percent from the same period of 2022, the Korea International Trade Association (KITA) said in a report on the impacts of the U.S. Inflation Reduction Act (IRA)’s implementation guidelines on Korea’s battery supply chain on Sept. 5. Korea’s cathode material exports showed a steep increase of 77.7 percent on average from 2019 to 2022.
This is attributed to exports from major Korean battery makers such as LG Energy Solution, which sent cathode materials to their factories in Europe and the United States.
Korea has a trade structure where an increase in cathode exports pushes up imports of lithium and precursors. Accordingly, Korea’s trade balance with China is also deteriorating as Korea relies heavily on China for lithium and precursors. In the first half of this year, Korea’s trade deficit in lithium and precursor trade reached US$5.09 billion and US$2.17 billion, respectively, of which its trade deficits with China alone came in at US$3 billion and US$2.11 billion, respectively.
Korea marked 59 percent of its total lithium trade deficit and 97 percent of its total precursor trade deficit with China. This means that about 88 percent, or US$5.11 billion of Korea’s US$5.81 billion trade surplus in cathode material exports in the first half of the year, went to China for Korea’s purchases of lithium and precursors.
Since 2022, China’s imports of compounds for making secondary batteries have exploded, significantly contributing to the deterioration of Korea’s overall balance of payments with China. In the case of lithium hydroxide, a lithium compound used to make ternary cathode materials by being added to precursors containing nickel, cobalt, and manganese, Korea’s trade deficit with China jumped from US$550 million in 2021 to US$3.21 billion in 2022.
The deficit also reached US$3.02 billion during the first half of this year. At this rate, Korea is expected to have a deficit of US$6 billion in trade of lithium hydroxide alone with China this year.
China Takes Big Chunk of Korea’s Earnings from Battery Material Exports
Exports of cathode materials, one of the core materials for electric vehicle batteries, are surging. But experts have pointed out that much of the money that K
www.businesskorea.co.kr
