[Special Stock] Dongkuk Industries, Cylindrical Secondary Battery Expansion 'Everyone's Joining'... Will Nickel Plating Supply Shortage Arrive Sooner?

Dongkuk Industries is showing strong performance. As the global cylindrical secondary battery market for electric vehicles rapidly grows, expectations for growth in the nickel-plated steel sheet business division appear to be influencing the stock price.

As of 10:16 AM on the 10th, Dongkuk Industries is trading at 7,620 KRW, up 16.87% from the previous day.

On the 6th, Dongwon Systems signed a business agreement with Dongkuk Industries at the Dongwon Industries Building in Seocho-gu, Seoul, for the "supply, sales, and development of raw material nickel-plated steel sheets for secondary batteries."

Through this agreement, Dongwon Systems secured a stable supply of nickel-plated steel sheets, one of the core raw materials for cylindrical battery cans. Dongwon Systems plans to mold and process the supplied nickel-plated steel sheets to expand production of cylindrical battery cans, whose demand is explosively increasing.

Since July 2022, Dongwon Systems has invested 58.5 billion KRW to expand a factory at its Asan plant in Chungnam capable of producing cylindrical battery cans of the 21700 standard (21mm diameter, 70mm height) and the next-generation 4680 standard (46mm diameter, 80mm height). The expansion was completed last February. Once full-scale production begins in the second half of this year, the plant will have an annual production capacity of over 500 million cylindrical battery cans.

According to the secondary battery industry, the global electric vehicle cylindrical battery market size is expected to expand from 108 gigawatt-hours (GWh) last year to 241 GWh in 2025 and 705 GWh in 2030. The compound annual growth rate (CAGR) is 27%, surpassing the global electric vehicle market's CAGR forecast of 19%.

Cylindrical batteries have the advantage of easy mass production and standardized specifications across manufacturers. Customers can receive supplies from various manufacturers and obtain timely deliveries. Japanese companies and domestic battery manufacturers are expected to compete in the cylindrical battery market. With the visible alliances among Panasonic, BMW, and Stellantis, fierce competition is anticipated with domestic companies producing cylindrical batteries. Domestic companies producing cylindrical batteries include LG Energy Solution and Samsung SDI.

Dongkuk Industries is negotiating key equipment specifications to enter the nickel-plated steel sheet business used for cylindrical battery cases for electric vehicles. Currently, major companies related to cylindrical batteries are aggressively investing in North America and Europe, and demand for nickel-plated steel sheets is expected to grow rapidly accordingly. Dongkuk Industries plans to invest approximately 88 billion KRW for expansion. Nickel-plated steel sheets are expected to face supply shortages starting in 2025.

Dongkuk Industries has also acquired and is operating the Gyeongju plant to enter the new ferro-tungsten business, a rare alloy iron. The global market size for ferro-tungsten is estimated at 15,000 to 19,000 tons annually. The overall tungsten market continues to show steady growth. Ferro-tungsten is used in applications requiring heat resistance and durability, such as automotive parts and cutting materials.