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South Korea is often recognized as a hub of technology innovation and battery R&D, but until recently the country was far behind its Asian peers in terms of its lithium consumption.
A decade ago the country was consuming under 3,000 tonnes of lithium chemicals, and it wasn’t until 2007 that it ramped up its lithium purchases to feed its growing manufacturing of lithium ion battery cathodes.
From a base of around 1,400 tonnes in 2001, orders from South Korea – which has no domestic sources of lithium – have increased at a CAGR of 18.9%. And in five of the past six years, the country’s lithium consumption has risen.
Demand from the country’s battery sector has seen it rise from a relatively minor player in the lithium space to a major end market over the past decade.
South Korea now accounts for 10% of global lithium demand and is the fourth largest global market.
With the country’s battery producers scaling up production ahead of the expected rise in demand from automotive and utility storage applications, consumption is set to continue on this trajectory, with orders forecast to exceed 20,000 tonnes LCE in 2016.
This rise will continue to be led by demand for lithium carbonate which accounts for 85% of sales.
Sales of lithium hydroxide have, however, more than doubled since 2012, from less than 1,000 tonnes to over 2,500 tonnes last year, indicating increased production of nickel cobalt aluminium (NCA) and lithium iron phosphate (LFP) battery cathode chemistries.
According to Benchmark Mineral Intelligence forecasts, battery demand from the automotive sector is expected to increase by 42% by 2020, while stationary storage demand will increase eight times, from a low base today.
This growing demand has already seen battery majors initiate plans to increase production capacities, expansions which will require significant new volumes of lithium raw material.
South Korea, hosting many of the world’s biggest battery companies, has become a major consumer for this consumption and will continue to grow in prominence out to 2020.
