Fortune Minerals : COBALT NEWS

The Korea Herald - March 8, 2021

Auto and battery manufacturers respond to raw material price hikes

Battery metal prices are going through the roof due to explosive global demand for electric vehicles, threatening to undermine their price competitiveness against internal combustion vehicles…According to Swedish market tracker EV Volumes, global electric vehicle sales in 2020 spiked to 3.24 million units, up 43 percent from 2.26 million on-year, triggering a surge in the price of raw materials for lithium-ion batteries. Nickel and cobalt registered prices at 17-month and 24-month highs, respectively, according to a Hana Financial Investment report…South Korean battery makers, which signed long-term supply deals when prices were lower, appear to be in a relaxed situation, as the latest spikes do not have a direct impact on their production costs…One local company official even said higher metal prices could be a boon to established players, as they raise the entry barrier for market newcomers…Korean firms, including SK Innovation, have been investing in a stable supply chain for years, recognizing the issue could be a source of business uncertainty…According to data from a US geological survey, 140,000 metric tons of cobalt were produced worldwide in 2019. Congo accounted for 70 percent, or 100,000 tons, followed by Russia with 6,100 tons and Australia with 5,100 tons…LG Energy Solution, which currently manufactures NCM 622, NCM 712 and NCM 811 batteries, plans to roll out NCMA batteries in the second half of this year. NCM refers to the metals used in the batteries -- nickel, cobalt and manganese. The three digits that follow represent the ratio of each of the metals used…The soon-to-be introduced NCMA batteries contain 90 percent nickel, with the remainder being cobalt, manganese and aluminum. By raising the ratio of nickel to 90 percent and adding aluminum as an alternative to cobalt, LG can not only make their batteries more powerful, but also cheaper. The more nickel inside batteries, the more powerful but less stable they become. The opposite applies to cobalt…'The rapid upward spiral of metal prices is slowing down and is expected to enter a moderate upward phase. Now, securing a stable supply metals has become a key criteria (when evaluating battery firms),' said Yuanta Securities analyst Kim Kwang-jin…Meanwhile, automakers are pilot testing a 'battery lease' program to make electric vehicles more accessible to general customers without concerns over battery prices, which account for 40 percent of the total costs of the electric car parts…'The program is expected to develop into a new business model that can reduce the price gap between EVs and internal combustion engine vehicles in countries where state subsidies for EVs don't exist,' a Hyundai Motor official said.