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“At the moment only Chilean battery-grade lithium carbonate can be taken for the stockpile,” a source told Fastmarkets, without disclosing the volumes being gathered.
South Korea’s first lithium tender for the national stockpile was issued in April, Fastmarkets understands, with the next due to take place on Friday May 24.
Pricing of the lithium carbonate for the tenders does not reference any of the pricing reporting agencies (PRAs) and is instead negotiated on a fixed outright price basis, the source told Fastmarkets.
One reason for South Korea to stockpile of lithium carbonate is that it has a longer shelf life and it’s easier to store than lithium hydroxide, which is considered a hazardous good, the source said.
The other key reason is that South Korea aims to develop its mid-nickel nickel cobalt manganese battery supply chain, the source added.
Last December, Fastmarkets noticed that some cathode makers, including some in South Korea, were switching back to mid- or low-NCM from high-nickel NCM cathodes to reduce costs and encourage consumers amid slowing demand for electric vehicles (EVs).
South Korean battery producer LG Energy Solution said last October that it planned to strengthen its product portfolio by targeting the mid- to low-end EV segment – namely high-voltage mid-nickel NCM solutions.
While high-nickel NCM battery cathodes require battery grade lithium hydroxide, mid-nickel NCM can also use lithium carbonate.
Other market participants said that the US Inflation Reduction Act (IRA) was the key reason why only Chilean lithium carbonate was eligible for South Korea’s stockpile because, starting from 2025, any clean vehicle eligible for the tax incentives under the IRA may not contain any critical minerals that are extracted, processed, or recycled by a “foreign entity of concern,” and that includes companies based in China, Russia, North Korea and Iran.
Due to the strong ties between South Korean battery makers and US car producers, the South Korean companies have been trying to diversify their lithium supplies and move away from their current heavy reliance on Chinese lithium and thereby ensure that they qualify for tax incentives under IRA,
Fastmarkets’ daily assessment of lithium carbonate 99.5% Li2CO3 min, battery grade, spot prices cif China, Japan & Korea was $13.50-15.00 per kg on Monday, unchanged since April 25.
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