Epidemic spread in Japan and South Korea Battery Industry chain Enterprises may face challenges

SMM News: February 28, the new crown virus epidemic occurred, the domestic implementation of strict control has been more than a month, the epidemic seems to be gradually improving, but in China's neighboring countries, the epidemic seems to be more serious, the number of confirmed cases in Japan and South Korea is increasing. At present, the number of confirmed cases in South Korea exceeds 2000, and the number of confirmed people on board the "Diamond Princess" cruise ship in Japan is also close to 1,000. The current situation in Japan and South Korea is quite grim, and with the further aggravation of the epidemic, it is bound to affect the industrial production situation of the two countries. As a relatively developed area of lithium battery technology in the world, Japan and South Korea will also limit the production of battery industry chain enterprises.

At present, the total production capacity of cathode materials in South Korea is close to 250000 tons. Among them, the main manufacturers of cathode materials in South Korea, Umicore, LIFF, ECOPRO and POSCO ESM are in serious epidemic areas, and LIFF and ECOPRO BM, as important suppliers of LG chemistry and Samsung SDI, will also affect the future production and operation of LG chemistry and Samsung SDI. Lengf Company is the largest manufacturer of cathode materials for lithium ion batteries in South Korea. Its cathode materials are relatively complete, mainly lithium cobalt (LCO), ternary material (NCM) and lithium manganate (LMO). The main customers of LanguF Company are Korean companies.

In addition, the epidemic in Japan also has a trend of rapid development, as of 8: 00 a.m. local time on 28 February, a total of 919 people were infected with the new crown virus in Japan, including 200 infected people in Japan, 705 passengers and crew of the Diamond Princess cruise ship, and 14 people returning to Japan on Japanese government charter flights. Due to the current Japanese virus detection capacity, it is expected that the actual number of confirmed people will be more than the current statistics, it is understood that some Japanese enterprises will stay at home within two weeks for two weeks, which will bring a lot of pressure to the normal production and operation of Japanese entities. According to data, the total production capacity of Japan's local cathode materials in 2019 is about 200000 tons, of which nearly 75% of the cathode material production capacity is concentrated in Sumitomo, Japan and Basifuda. According to SMM, the main cathode material manufacturers in Japan are currently far away from the epidemic area.

Samsung Electronics said an employee at a smartphone factory in the southeastern South Korean city of (Gumi) tested positive for the new coronavirus, Yonhap news agency reported on Feb. 22. Samsung Electronics then temporarily closed the plant.

Hyundai said Friday that an employee at its factory in Ulsan, South Korea, had been detected to be infected with the new crown virus, confirming earlier media reports. The company said it had suspended production at the plant, requiring all employees who had been in close contact with the patient to isolate themselves and would be tested for the virus. Hyundai has five car plants in Ulsan, producing 1.4 million vehicles a year, accounting for nearly 30 per cent of the company's global output. Hyundai employs 34000 people locally.

In addition, affected by the new crown virus epidemic in Daegu, LG and LG Display have quarantined more than 900 employees living in Daegu, who account for about 10 per cent of LG tortoise tail factory employees. Other companies in the tortoise tail industrial park are also discussing whether to do the same.

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