[Bojo, Battery] Anode Material Exports Escape Worst Slump... Soar 48% in February

Lowest Since HS Code Introduction in December Last Year
Clear Recovery in Export Volume This Year
Yanggeukjae Price May Fall Below $30,000 This Month

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Exports of cathode materials, a core component of batteries, have rebounded. Despite automakers engaging in a chicken game by lowering electric vehicle prices, demand for secondary battery materials has actually increased. While some analysts view this as a temporary phenomenon, cautious forecasts suggest that prices may also rebound as production decreases.

According to customs export-import trade statistics on the 22nd, the average daily export weight of NCM (Nickel-Cobalt-Manganese) and NCA (Nickel-Cobalt-Aluminum) cathode materials from the 1st to the 20th of this month was 666 tons, a sharp increase of 48% compared to December last year. The average daily export value was $20.96 million (approximately 27.9 billion KRW), up 25.4% during the same period.

The increase in cathode material exports can be interpreted as a sign of rebound, considering that exports in December last year were the lowest in two years since the introduction of the customs export-import code (HS code). Professor Lee Ho-geun of Daeduk College's Department of Automotive Studies explained, "The increase in cathode material exports since the new year is due to the temporary recovery in demand as electric vehicle subsidies in various countries, which had bottomed out at the end of the year, have been reintroduced." He added, "It appears that cathode material exports have hit bottom and entered a rebound phase." He continued, "However, it is necessary to observe for another month or two before saying that demand has fully recovered," adding, "The opening of the electric vehicle market in North America this year is somewhat positive."

Expectations for front-end demand for battery cells, such as electric vehicles and ESS (Energy Storage Systems), where cathode materials are mainly used, are growing. Unlike the European and Chinese markets, which are experiencing a chasm (temporary stagnation in growth industries) with electric vehicle penetration rates exceeding about 16% this year, the North American market, where the electric vehicle market is just beginning to grow, is seeing increased demand for electric vehicles and PHEVs (Plug-in Hybrid Electric Vehicles). Cathode material companies such as POSCO Future M and LG Chem, which have secured large-scale supply contracts in the North American market including GM, are expected to be advantageous in defending their performance.

Recovery in demand for lithium, another material used in electric vehicle batteries, is also anticipated. The Wall Street Journal (WSJ) reported on the 19th (local time) that "current lithium prices are too low to maintain lithium mining volumes in Australia and China," and "there is no investment in new production needed to meet the growth of the electric vehicle market. The supply reduction phase could instead become a condition for a lithium price rebound."

Unlike the increase in export volume, cathode material prices still showed a downward trend. The average export price of NCM and NCA cathode materials was $31,473 per ton, down about 8% compared to last month. However, recent analyses suggest that the prices of main raw materials for cathode materials are stabilizing. According to the Korea Resources Information Service, the price of nickel rebounded to 16,135 yuan per ton (approximately 2.99 million KRW) as of the 20th, up from 15,620 yuan per ton (approximately ___ KRW) earlier this month. Lithium carbonate also stopped its decline at around 88,000 yuan per ton.