※ Secondary Battery Material Industry:

※ Secondary Battery Material Industry: Competitive Strength and Captive Market (Part. 1)

Basically, my personal view of the secondary battery materials industry is that only a few companies that have successfully settled by betting when the opportunity arises, or those that already have strong competitiveness, will survive, and the rest will remain culled or alive.
As was the case in the Chinese material market, the gap between the first and second-largest companies and the rest of the companies is expected to widen over time and many companies will disappear in the long run.

Since the secondary battery industry is entering a full-fledged growth period after the initial market, it is natural for the industry to be reorganized into competitive companies.

In this trend, the most important factors to consider when investing in secondary battery material companies are the strength of competition with their peers and the presence of a captive market.  

● Competitive intensity

First of all, in terms of competitive strength,
If there are very strong competitors in the industry, or if there are many competitors, they have to compete fiercely, and it is difficult for lower-ranking companies to operate their businesses normally over a long period of time.

Over the past few years, Chinese material companies have had high price competitiveness based on vertical integration and economies of scale, and have long supplied materials to global battery companies, driving their technology to a high level.
In general, the technology of suppliers depends on how closely they have worked with leading customers.  

Therefore, except for the Heinickel anode material, the rest of the domestic secondary battery material companies have been struggling for a long time, falling behind in competitiveness with China.

However, IRA and FEOC were able to get away from the strong competitor of China, which opened up a very big opportunity for domestic material companies.

With China's competition waning, South Korean and Japanese companies have begun anew to take up the vacancy in China, where companies are quickly emerging to take control of hegemony, and the stock market is also looking for them.

In terms of competitive strength considering Capa, POSCO Future M of cathode material, Enchem of electrolyte solution, and central high-tech material of electrolyte salt (LiPF6) are the most attractive among domestic material companies.

○ Competition by major materials (excluding China)

▷ graphite cathode material  
(Korea) POSCO Future M
(일본) Hitachi Chemical(Showa Denko), Mitsubishi Chemical, Nippon Carbon

▷ a separation membrane
(Korea) SKiet, WCP, LG Chem (+Toray JV)
(일본) Asahi Kasei, Toray, Sumitomo Chemical, Ube Industry

▷ electrolyte solution
(Korea) Enchem, Solbrain Holdings, Donghwa Electrolite, Deoksan Electra
(일본) Mitsubishi/Ube, Central Glass

▷ a precursor
(Korea) Eco Promaterials, POSCO Future M, LG Chem (Korea Zinc), LS Group (L&F), Eco & Dream, Mirae Nanotech
(일본) Nichia, Sumitomo
(Other) Yumi Core & Volkswagen JV

▷ Electrolyte salt (LiPF6)
(Korea) Huseong, Central Advanced Materials (EDL)
(일본) Morita, Central Glass, Kanto Denka

※ Global mining and smelting companies such as Glencore, Albemarle, SQM, and Alchem are responsible for the production and smelting of lithium, cobalt, and nickel, and Korea Zinc and POSCO Holdings (Posco Lithium Solution) are competitive in Korea.

※ Also, materials such as a silicon anode material, CNT, carbon black, a binder, an additive, and a special electrolyte salt (LiFSI, etc.) occupy a very low proportion in the battery.
FEOC regulations are not applied up to 2% of battery cost (in some cases, they may be exposed to competition with Chinese companies)