Ministry of Industry Urgently Inspects Secondary Battery Supply Chain... Research Service Contract Issued

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government has taken additional follow-up measures to stabilize the supply chain, including an in-depth analysis of the supply and demand status of secondary battery materials and the extension of the support system for diversifying crude oil imports.

According to the Ministry of Trade, Industry and Energy on the 21st, an urgent research project titled "Supply and Demand Trends and Prospects of Secondary Battery Materials, Components, and Raw Materials" was recently commissioned.

In the task directive, the Ministry stated, "It is necessary to investigate the supply chain status of secondary battery raw materials and materials/components, which currently have a high dependence on overseas sources, and to prepare countermeasures for future supply and demand risks," adding, "Please analyze the market size and growth rate by secondary battery demand markets such as electric vehicles and electric ships, and investigate the supply system of raw materials and materials/components necessary for the domestic secondary battery industry."

Specific research contents include ▲ investigation of the current status and prospects of lithium secondary battery and raw materials, materials, and components industries by country such as Korea, China, and Japan ▲ risk analysis and discovery of countermeasures reflecting the market size and growth rate of lithium secondary battery demand industries such as transportation industry (electric vehicles, electric ships) and mobile information technology industry (mobile phones, laptops) ▲ prospects for future raw material supply systems and policy discovery necessary to secure a stable supply chain.

The government urgently began checking the supply chain because a significant portion of the core materials used in secondary batteries depends on imports from China. According to the Korea International Trade Association, the import dependence on China for lithium hydroxide, a core secondary battery material, recorded 83.5% from January to September this year. Imports of other core materials such as manganese (manganese products) and graphite showed 99% and 87.7% dependence on China during the same period, respectively. The import dependence on China for other secondary battery raw materials such as cobalt hydroxide and cobalt sulfate is also high at the 80% level. The Ministry of Trade, Industry and Energy diagnosed, "China is the only country in the world that possesses the entire value chain from mining battery raw materials to processing, cell/module/pack manufacturing," adding, "If export regulations from China occur, the global secondary battery downstream industry will be affected."

The Ministry plans to complete the research within six months, then build a database (DB) of the supply and demand status of secondary battery raw materials and materials/components based on the results and establish a supply chain strategy.

Additionally, to secure energy supply stability, the government decided to extend the support system for diversifying crude oil import routes, which was scheduled to expire at the end of the year, until December 31, 2024, for three more years. Introduced in 2014, the crude oil import route diversification support system refunds part of the crude oil import costs for crude oil imported from regions outside the Middle East such as the Americas, Europe, and Africa. The designation of the target regions will also change from the existing 'non-Middle East regions' to 'diversified regions.' The Ministry of Trade, Industry and Energy announced the amendment to the "Petroleum and Petroleum Substitute Fuel Business Act Enforcement Decree" containing these details on the 18th and plans to finalize it after subsequent procedures.

Furthermore, from the perspective of supply chain response, the organization and system related to materials, components, and equipment (SoBuJang) established as a temporary organization within the Ministry of Trade, Industry and Energy during Japan's export regulations will be maintained for one more year.

This content was produced with the assistance of AI translation services.