SK Innovation signed a supply contract of KRW2.7 trillion with cathode materials

SK Innovation [096770] has concluded a mid-to-long-term supply contract with the company's largest producer of battery cathode materials, Ecopro BM [247540], about KRW 2.77 trillion. Ecoprom will build a dedicated plant to meet SK Innovation's volume. SK Innovation and Ecopromb announced on the 3rd that they have signed a long-term supply contract for high nickel-based NCM anodes. The contract period is from the first of this month to December 31, 2023, and the total contract size is 2.77 trillion won. Ecopromb, which has production bases in Cheongju, Chungbuk, plans to start construction of a cathode materials plant exclusively for Pohang in Pohang in early 1Q, in order to meet the supply volume for SK Innovation. The cathode material plant will have three production lines, with an annual production capacity of 26,000 tons, the company said. Cathode is the key material that determines battery capacity and output.

 

SK Innovation, which is aggressively investing in the battery business, believes its investment has a positive impact on the downstream industry. At the end of last year, SK Innovation completed a 7.5GWh annual battery plant in Komarom, Hungary, and Changzhou, China. As a result, as of the end of last year, the production capacity was expanded to 19.7GWh per year, which can supply 400,000 electric vehicles. In 2017, it has grown more than 11 times from 1.7GWh in 2 years. It is also currently building a new 9.8GWh battery plant in Georgia, USA, and recently announced that it will make additional investments of similar size. It is also building a second plant in Hungary. An official of SK Innovation said, “As a result of winning large-scale supply contracts from finished car companies, there is a 'fall effect' that has a positive effect on the rear material industry.”