The influence of China on the market of lithium batteries is determined not so much by the reserves of minerals necessary for their production, as by the concentration of enterprises for the primary processing of raw materials. In many areas, the PRC is almost a monopolist, and therefore has the ability to dictate prices. South Korean battery manufacturers are now forced to increase the cost of production by 8-10%.
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They are forced to take such unpopular measures by the pricing policy of Chinese suppliers of raw materials, as explained by Business Korea . For reference, the cost of lithium compounds used in the manufacture of batteries increased fivefold over the year, and in November alone it increased by 24.3%. Lithium reserves are concentrated in South America and Australia, but Chinese companies buy local raw materials for further processing and supply to foreign markets, so they have the opportunity to determine the pricing policy almost on a global scale. Directly, the reserves of lithium in China do not exceed 5–6% of the world, but in the supply chain of related raw materials, the country controls at least 60% of the market.
In the case of South Korea, Chinese companies are also supplying other minerals required for the production of lithium batteries. Cobalt prices have tripled over the year, and the cost of a ton of nickel for the first time since May 2014 in November exceeded $ 20,000.
Korean battery manufacturers, which are gaining more and more influence in the global market, are forced to rely on Chinese raw materials. Samsung SDI already had to raise the price of its cylindrical lithium batteries by 8% in November. LG Energy Solution will increase the cost of 21700 units by 10% from January in an attempt to offset the recent surge in commodity prices. Obviously, such a trend cannot contribute to the further popularization of electric vehicles, because in the cost of such vehicles, the price of a battery can reach up to a third or even half.
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