South Korea is making strategic moves to secure its battery-grade lithium carbonate supply by establishing a national stockpile, with only Chilean lithium carbonate currently being accepted for the initiative. This information comes from a reliable source speaking to Fastmarkets.
The country’s first lithium tender for the national stockpile was issued in April, with another one scheduled for Friday, May 24. Pricing for the lithium carbonate in these tenders is negotiated based on a fixed outright price and does not reference any pricing reporting agencies.
One of the main reasons behind South Korea’s decision to stockpile lithium carbonate is its longer shelf life and easier storage compared to lithium hydroxide, which is considered hazardous. Additionally, the country is looking to develop its mid-nickel nickel cobalt manganese battery supply chain.
Market trends have also played a role in this decision, as some cathode makers have been switching back to mid- or low-NCM cathodes to reduce costs amidst slowing demand for electric vehicles. South Korean battery producer LG Energy Solution has also expressed plans to target the mid- to low-end EV segment with high-voltage mid-nickel NCM solutions.
Furthermore, the US Inflation Reduction Act has influenced South Korea’s choice of only accepting Chilean lithium carbonate for the stockpile. This decision aims to ensure that the country qualifies for tax incentives under the IRA by avoiding critical minerals extracted, processed, or recycled by foreign entities of concern.
As the lithium carbonate market remains steady with prices unchanged since April, South Korea’s strategic moves in securing its lithium supply highlight the country’s commitment to reducing reliance on Chinese lithium and diversifying its sources.
