S.Korea’s imports of LFP cathode reverses to growth after 8 years

South Korea's imports of cathode materials used to make lithium ferrophosphate (LFP) batteries in the first five months of this year rose for the first time in eight years.

Analysts say domestic battery makers accelerating the development of such batteries are buying the materials from China.

The Korea International Trade Association on Monday released trade statistics saying imports of LFP cathode materials from January to May reached $3.5 million (4.6 billion won), up 8.1% from the same period last year. Import volume reached 492 tons, up 2.1% and the first time since 2016 that both the volume and amount of such substances increased.

LFP batteries had received a low evaluation for poor performance because they are relatively heavier than ternary batteries and have low energy density. Yet demand for such batteries, which are cheap and easily obtainable, has risen from automakers including Tesla, the world's largest electric vehicle (EV) manufacturer.

South Korean companies have produced high-performance ternary batteries with high energy density like NCA (nickel, cobalt and aluminum) and NCM (nickel, cobalt and manganese).

"At the request of EV and energy storage systems clients, three domestic battery companies – LG Energy Solution Ltd., Samsung SDI Co. and SK On – have accelerated the development of LFP batteries," an industry source said. "Though still in the early stages, getting domestically made LFP cathode materials necessary for R&D immediately isn't possible, leading to dependence on imports."

China accounts for over 95% of the global LFP battery market and dominates LFP cathode materials, with just two companies – Hunan Yuneng and Dynanonic – meeting 40% of the world's demand for such materials.

Write to Mi-Sun Kang at misunny@hankyung.com