[SMM Analysis] under the influence of epidemic situation, the uncertainty of Enterprise production in Japan and South Korea increases the concern of the Industry

SMM, March 05 / PRNewswire-Asianet /

The epidemic situation in Japan and South Korea has not yet been effectively controlled. Affected by the epidemic, a number of Japanese and South Korean enterprises have closed some factories, including Samsung Electronics, Hyundai Motor and so on. The outbreak in Japan and South Korea has also affected the hearts of participants in the new energy vehicle industry.

According to SNE statistics, in 2019 global power battery shipments ranking, Japan's Panasonic, PEVE, South Korea's LG Chemistry, Samsung SDI, and SKI all ranked among the top ten in the world, it can be seen that Japanese and South Korean enterprises play an important role in the global new energy industry chain. In addition, in order to meet the needs of local battery enterprises, Japan and South Korea also distribute a large number of cathode material enterprises.

According to SMM research, the current epidemic has no impact on the production of new energy enterprises in Japan and South Korea, but the relevant prevention and control measures are very strict, some employees work from home. If there are confirmed cases in the factory, production suspension and isolation measures will be taken.

Battery companies: South Korea lithium faucet LG chemistry, Samsung SDI and SKI Korea local factories are located in Zhongbei, Ulsan and Zhongnan, the factory is located in the area of less confirmed cases, is still in normal production, affected by the epidemic is relatively small.

Materials enterprises: the main manufacturers of cathode materials in Korea, Ludf, ECOPRO and POSCO ESM factories are located in the area where the epidemic is more serious. Among them, the three cathode material production plants currently owned by LG F in South Korea are located in Daegu and Gyeongshang North Road, where the epidemic is the most serious. LIFF is an important supplier of cathode materials to LKF chemistry. In terms of cathode materials in Japan, the total production capacity of local cathode materials in Japan in 2019 is about 200000 tons, and nearly 75% of the cathode material production capacity is concentrated in Sumitomo, Nippon Chemical and Basifuda. According to SMM, the main cathode material manufacturers in Japan are far away from the epidemic area.

As most of Japan and South Korea are battery enterprises and cathode material enterprises, there is a large import demand for ternary materials, ternary precursors and lithium salt. In terms of exports, domestic ternary precursors export an average of about 25 per cent a month; because China has the world's largest lithium hydroxide smelting capacity, domestic lithium hydroxide exports account for 60 per cent of the total output. Among them, more than 97% of China's ternary precursor was sent to Japan and South Korea in 2019, and more than 96% of lithium hydroxide was sent to Japan and South Korea. If the epidemic in Japan and South Korea cannot be effectively controlled in a short period of time, the exports of these two types of products may be greatly affected. Specifically:

[export structure of China's ternary precursor in 2019]

【三元前驱体出口日韩数量前五名企业】

China's ternary precursor is mainly exported to South Korea. At present, except for the hindrance of Greenmei export trade in Hubei, the exports of other enterprises remain normal. According to feedback from precursor manufacturers, although short-term export business has not been affected for the time being, as the epidemic in South Korea becomes more and more serious, fears are increasing. In the long run, if the South Korean epidemic can not be effectively controlled in the short term, the second quarter production and sales of enterprises with an excessive proportion of export business may be affected (such as Zhongwei, Yumeike, Cologne, etc.), further affecting the demand for upstream raw materials.

[export structure of lithium hydroxide in 2019]

[lithium hydroxide exports to the top five enterprises in Japan and South Korea]

A total of 46000 tons (tons in kind) of lithium hydroxide were exported in 2019, of which about 60 per cent went to Japan and 35 per cent to South Korea. According to the domestic lithium hydroxide factory to SMM, the current domestic lithium hydroxide export business as usual. On the one hand, due to Japan and South Korea material factories and battery enterprises have not stopped production, on the other hand, lithium hydroxide in the first quarter of the long order is still in normal performance.

To sum up, although the current production of Japanese and South Korean enterprises has not appeared abnormal, but the more serious epidemic of South Korean customers to consider the uncertainty of subsequent demand, has begun to take measures to reduce the number of long orders or delay the pick-up of goods. For the follow-up market development, we believe that there are mainly the following two possibilities: 1) in view of the global spread of the current epidemic, if the current epidemic is not effectively controlled in the short term, or will affect the global demand for new energy terminals, and eventually transmit to all aspects of the industry chain, the annual demand is lower than expected; 2) the terminal demand is supported by policies (such as subsidies for new energy vehicles in Guangzhou), and the demand of battery enterprises remains normal. However, some factories of South Korean materials enterprises are in epidemic areas, the operating rate may be limited, or will increase the volume of domestic material exports.

The development of the epidemic situation is still uncertain, and will directly affect the annual demand and material price trend of the new energy market. The follow-up dynamic SMM will continue to pay attention to.

SMM Battery Materials Research team

Hu Yan 021-51666809

Qin Jingjing 021-51666828

Mei Wangqin 021-51666759

Huo Yuan 021-51666898

Wuyang 021-51666818

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