Global firms SMS, LOTTE cooperate on new EV-focused US aluminium plant

German equipment provider SMS Group will provide a logistics and storage system for a forthcoming $238.7 million aluminium foil plant being built in the US by South Korea’s LOTTE Group to meet demand for the material’s use in electric vehicles (EVs)

The Dusseldorf-based company, a specialist in mechanical engineering and technology for the metals industry, announced the collaboration with LOTTE on Tuesday, November 29.

LOTTE said in August this year that subsidiaries LOTTE Chemical and LOTTE Aluminium had formed a joint venture to build a manufacturing facility in Elizabethtown, in the US state of Kentucky, to produce 36,000 tonnes per year of cathode foil.

This material is a type of ultra-thin aluminium foil that is a core material used in EV batteries, according to an announcement at the time by Kentucky state governor Andy Beshear.

“Cathode foil is one of the four major components of lithium-ion batteries. It supports the cathode active material that determines the capacity and voltage of the secondary battery, and at the same time serves as a passage for electrons,” LOTTE added.

The LOTTE Group, one of South Korea’s largest conglomerates, is a broad-based manufacturing company that employs more than 80,000 people worldwide.

Similarly, SMS has about 100 locations worldwide, with its 14,500 employees focused on the steel, aluminium and copper industries.

LOTTE’s venture is “the latest electric-vehicle-related investment in Kentucky,” Beshear said.

US makes up for lost time on EVs

The US has lagged behind Asia and Europe in the adoption of EVs, but was now said to have the fastest rate of EV adoption worldwide.

Many EV initiatives in the second half of 2022 were expected to spur US adoption of EVs, including the broad-based funding bill known as the Inflation Reduction Act, which passed in August.

Many metal prices may rise as a consequence of this, market observers have said, especially for primary aluminium metal. Aluminium was expected to surpass steel as the principal metal used in vehicle construction, once the transition to lightweight battery-run EVs from heavier combustion-engine cars is complete.

The benchmark US aluminium premium was flat in an atmosphere of subdued spot demand in Fastmarkets’ latest assessment on Tuesday – at about half its value earlier this year.

Fastmarkets’ assessed the aluminium P1020A premium, ddp Midwest US, at 19-22 cents per lb on November 29, unchanged from November 25. The 21.5 cents per lb midpoint was down from the all-time high of 40 cents per lb, which lasted until May 3, 2022, before fear of recession displaced fear of inadequate aluminium supply.

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