[Featured Stock] Isu Chemical, Highlighted as Korea's Only Lithium Sulfide Producer... Valuation Rises Due to US Inflation Reduction Act

[Asia Economy Reporter Hyungsoo Park] Isu Chemical is showing strong performance day after day. The excitement seems to be growing as it signed a comprehensive Memorandum of Understanding (MOU) for mutual cooperation in the development of solid-state batteries with Heesung Catalyst.

As of 11:53 AM on the 25th, Isu Chemical is trading at 19,450 KRW, up 10.2% from the previous day.

During the session, the price rose to 19,750 KRW, setting a new 52-week high.

Isu Chemical and Heesung Catalyst have agreed to collaborate to secure the quality and specifications of solid electrolytes. Isu Chemical plans to supply lithium sulfide (Li2S), a sulfide-based solid electrolyte raw material for solid-state batteries, to Heesung Catalyst.

Following agreements with EcoPro BM and Solid Power in April and June respectively, this marks the third lithium sulfide-related agreement this year. Through this MOU, Isu Chemical has identified demand and potential customers for lithium sulfide. It is expected that the series of MOUs will strengthen Isu Chemical’s efforts in advancing its lithium sulfide business.

Heesung Catalyst is the first company in Korea to produce catalysts for automotive exhaust gas purification and has recently been continuously promoting eco-friendly material businesses, such as developing electrode catalysts used as core components in fuel cell systems in line with the carbon neutrality trend.

Isu Chemical is the only company in Korea capable of supplying lithium sulfide (Li2S). At the end of last year, Isu Chemical unveiled lithium sulfide samples at the Korea Industrial Technology R&D Exhibition. It aims to complete a demo plant for pilot production of lithium sulfide in the second half of this year. The lithium sulfide produced by this facility is estimated to be about 20 tons annually.

Earlier, in June, Isu Chemical signed a non-binding MOU with the US company Solid Power to explore long-term business cooperation for supplying lithium sulfide (Li2S). Under this agreement, Isu Chemical will supply lithium sulfide to Solid Power, which will use it as a raw material for producing solid electrolytes. The MOU also includes mutual consultations for future supply contract agreements.

Isu Chemical CEO Seungho Ryu stated, "I hope this will be a starting point for a win-win relationship between Isu Chemical and Heesung Catalyst for mass production of solid-state batteries," adding, "Since we agreed to cooperate to improve the quality of solid electrolytes, we will actively collaborate to upgrade the technological capabilities of both companies."

There are also expectations that the mass production speed of solid-state batteries will accelerate following the passage of the Inflation Reduction Act in the United States. QuantumScape, which manufactures solid-state batteries, is expected to benefit in the long term. The solid-state batteries developed by QuantumScape have shorter charging times and longer driving ranges compared to conventional electric vehicle batteries. Commercialization is targeted for 2024-2025.

Domestic battery manufacturers such as LG Energy Solution, Samsung SDI, and SK On are focusing on developing batteries with solid electrolytes that overcome the limitations of lithium-ion batteries. The timeline for mass production, which was expected to begin after 2030, is now gradually being brought forward.

Kiwoom Securities noted that lithium sulfide, a key raw material for sulfide-based solid electrolytes, is priced at a premium, and since Isu Chemical possesses hydrogen sulfide handling technology, it is expected to contribute to lowering the cost of lithium sulfide.

Isu Chemical is the only domestic company with hydrogen sulfide handling technology essential for solid-state battery processes. Based on its technological capabilities, it has participated since last year in a national project led by the Ministry of Trade, Industry and Energy called ‘Development of Core Technologies for Next-Generation Electric Vehicle Batteries,’ conducting research on cost reduction technologies for raw materials used in sulfide-based solid electrolytes. Hyundai Motor and Samsung SDI are known to be participating as demand companies in this national project.

Isu Chemical is building a demo plant for the production of lithium sulfide (Li2S) prototypes, a core raw material for solid-state batteries and sulfide-based solid electrolytes used in solid-state batteries. The facility, with an annual capacity of 20 tons, is scheduled to begin operation in the fourth quarter of this year.