10% increase in LG Ensol following Samsung SDI
Oversupply of price burden due to supply shortage
LG Energy Solution will raise the price of cylindrical batteries by 10% in January of the new year. Earlier, it was confirmed that Samsung SDI also increased by about 7% last month. Except for Hyundai Motor Group, most mobility companies in Korea mainly use cylindrical batteries. It is also expected that the price increase of finished products such as electric vehicles and energy storage systems (ESSs) produced by small and medium-sized companies will be inevitable.
According to battery distributors and agencies on the 22nd, Samsung SDI raised the price per cylindrical battery (standard 21700) by 7-8% last month. LG Energy Solution also announced a 10% increase next month. This is the first time that cylindrical batteries have risen sharply by 10% since the start of distribution in Korea. The 21700 (standard) product, which is most commonly used as a cylindrical product, is expected to rise from 2.5 dollars (about KRW 2,900) per piece to the early and KRW mid-3,000.
There are only two domestic cylindrical battery manufacturers, Samsung SDI and LG Energy Solutions. Customers include small and medium-sized electric vehicle manufacturers, as well as small-sized electric buses, electric trucks, electric excavators, and ESS. This is because prismatic and pouch batteries are mainly supplied to large domestic and foreign carmakers.
The increase in cylindrical battery prices is attributable to a surge in mineral prices such as cobalt and nickel, which are key raw materials. Small and medium-sized mobility industries are expected to suffer a double whammy due to the already lack of battery supply. An official from a distribution company said, "Samsung and LG have even suggested the possibility of an additional increase once more in the new year." Unlike the price increase of prismatic or pouch-type batteries for large customers such as finished cars, the increase in cylindrical batteries is much smaller because the supply is much smaller.
According to the Korea Resources Corporation, cobalt prices reached $69,000 (about KRW 81.18 million) per ton earlier this month. This is a 119% increase compared to the average price over the past year. Lithium prices also jumped 410% from last year's average price, recording 190.5 yuan (about KRW 35,300) per kg. Nickel prices also rose to $20,305, up 47% from last year's average price.
【Table】 Prospect of the electric vehicle cylindrical battery market (SNE Research)
By Staff Reporter Tae-jun Park (gaius@etnews.com)