Competition to Lead in EV Battery Recycling Amid Full-Scale Growth
US Adopts Battery Material De-China Policy
Saevitchem Achieves Industry-Top Precious Metal Recovery Rate...Secures Cost Competitiveness
[Asia Economy Reporter Hyungsoo Park] Saevitchem is showing strong performance. The U.S. has clearly stated its policy to reduce dependence on China for battery materials, which seems to be influencing the stock price as the waste battery recycling ecosystem is expected to be established faster than anticipated.
As of 11:46 AM on the 10th, Saevitchem is trading at 75,200 KRW, up 8.99% from the previous day.
After listing on the 4th with an opening price of 70,000 KRW, the stock price rose to as high as 91,000 KRW during the day. It then fell to 65,100 KRW the previous day due to profit-taking sales but is now rebounding.
Saevitchem recorded a competitive rate of 1,670.9 to 1 in the institutional demand forecast conducted earlier. The public offering price was set at 35,000 KRW, exceeding the upper limit of the desired price range of 30,000 KRW. The subscription for public offering shares for general investors attracted deposits totaling 8.075 trillion KRW.
Saevitchem is a waste battery recycling company specializing in secondary battery precursor composite solutions and recycled cathode materials. It also operates a recycling business for waste acid from semiconductor and display industries. In the first quarter of this year, the waste battery-related business accounted for 60% of sales, and the waste acid recycling business accounted for 30%.
The waste battery recycling business collects defective products from cathode active material manufacturers and decomposes them into raw materials such as nickel, cobalt, manganese, and lithium, which are key elements for secondary batteries, to sell or mix them with solvents to sell as precursor raw material composite solutions.
Researcher Kyung Choi from Heungkuk Securities explained, "Based on high technology, they have secured excellent sales channels," adding, "In the leaching process that removes impurities, they raised the recovery rate of precious metals to the industry's highest level of 95% using multi-stage leaching technology." He continued, "In the solvent extraction process that removes residual impurities and extracts the raffinate, they produce precursor materials in liquid form, simplifying the process and achieving a cost ratio of 69%. This cost ratio is 20 percentage points lower than the industry average, enabling stable operating profit margins despite fluctuations in raw material prices."
Saevitchem also produces phosphate, a fertilizer raw material, by recycling waste acid generated from semiconductor and display processes. Additionally, it supplies sub-materials for lithium secondary batteries used in electric vehicles by refining and separating cathode active materials from waste lithium-ion secondary batteries.
Saevitchem plans to establish a third plant with the proceeds from this public offering. Starting in 2024, Saevitchem will supply large-scale precursor composite solutions to LG Chem’s joint venture for 10 years. They plan to expand production capacity from 6,000 tons to 18,000 tons by 2024, more than tripling it.
Saevitchem received approval from LG Chem this year to supply precursor composite solutions. They signed an MOU to supply precursor composite solutions for 10 years starting in 2024 with Korea Precursor Co., Ltd., a joint venture between LG Chem and Korea Zinc. The structure is such that Saevitchem supplies precursor composite solutions to Korea Precursor Co., Ltd. using recycled cathode materials supplied by LG Chem, which then supplies them back to LG Chem.
According to SNE Research, an energy-specialized market research firm, as the lifespan of electric vehicle batteries, which began to be produced in 2020, approaches its end, more than 100,000 batteries are expected to be discarded annually starting from 2030. The waste battery market is estimated to expand to ▲3 trillion KRW in 2025 ▲21 trillion KRW in 2030 ▲87 trillion KRW in 2040 ▲600 trillion KRW in 2050. Explosive growth of 25-45% annually is expected.
The waste battery recycling business is directly linked to lowering the prices of batteries and electric vehicles. Batteries account for 30-40% of the price of electric vehicles, and more than half of that is raw material costs. As demand for electric vehicles increases, recycling raw materials from discarded waste batteries can significantly reduce prices.
With several years having passed since electric vehicles began to be widely adopted, waste batteries are expected to increase rapidly, which will also expand the recycling market. This is why investors who have observed companies like Ecopro and L&F rapidly grow as secondary battery material suppliers are now paying attention to waste battery recycling companies.
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