Signal Korean battery makers rely heavily on China for key materials

Summary

Korea's three battery makers, LG Energy Solution, SK On and Samsung SDI, have world-leading cell manufacturing capability, yet their dependence on China for core materials is very high. According to KOTRA data cited by the author, China accounted for 87.9 percent of Korea's lithium hydroxide imports in 2022. Some core materials such as graphite are also heavily dependent on China, so a supply disruption could weigh on the entire domestic battery industry. When China announced graphite export controls in 2023, concern in the Korean battery sector grew because graphite is the key raw material for anodes. China has repeatedly used export controls on critical minerals, and assessments suggest that dependence on some minerals cannot be fully removed in the short term despite diversification efforts. The case shows supply-chain vulnerabilities that manufacturing excellence alone cannot resolve.