Battery materials play a vital role in the global energy storage supply chain; although battery cell manufacturers are the ones who receive the most attention, the performance, cost and reliability of a battery also depend on the materials used within it, lithium compounds, the cathode active materials, the anodes and the other components all affect how much energy the battery can store, how fast it can charge and how long it can work.
Interest in these materials is increasing since electric vehicles, renewable energy projects and Battery Energy Storage Systems (BESS) are expanding around the world. In order to ensure a supply of raw materials, manufacturers are focusing on improving the performance of the materials and on setting up their production capacity near the main centres of battery manufacturing.
China is still a major player in the production of battery materials, especially in those relating to the cathode and anode. At the same time, companies from the United States, Europe, South Korea and other regions also have important roles in the extraction of lithium, its refining and in the manufacture of advanced battery materials.
There are five major companies which are operating in various sections of the battery materials value chain.
1. Albemarle Corporation
Albemarle Corporation is a major global provider of lithium and other lithium-based chemicals used in rechargeable batteries and is based in the United States, supplying the materials needed for the production of lithium-ion batteries for use in electric vehicles and for energy storage.
Lithium is an essential element in most commercial lithium-ion battery formulations, and battery producers use processed lithium compounds such as lithium carbonate and lithium hydroxide when manufacturing cathode materials. The quality and availability of these compounds can have an effect on the costs of battery production and on supply security.
The lithium business of Albemarle links together upstream resource development with the rising demand for battery-grade chemicals, and because of its operations and supply arrangements it has a position in a market where battery manufacturers are increasingly in need of reliable access to raw materials.
The significance of lithium suppliers in the field of energy storage goes well beyond that of electric vehicles, since large-scale BESS installations also need large amounts of lithium-ion battery cells and thus the growth of grid storage is connected to the demand for battery-grade materials.
With the growth of battery manufacturing, companies like Albemarle still play a significant role in the upstream part of the supply chain; the extent to which they can develop resources, process lithium efficiently and keep up reliable supplies will affect the availability of materials for future battery production.
2. Ganfeng Lithium
Ganfeng Lithium is a company based in China which has operations at various stages of the lithium supply chain, such as lithium resource development, processing and the production of lithium compounds and related battery materials.
The company supplies the materials used in lithium-ion batteries and its operations are pertinent to battery manufacturers who need lithium chemicals for various battery chemistries and applications.
A major challenge for the battery industry is that while mining lithium is the first stage, the material has to be processed and refined in order to meet the purity standards needed for battery manufacturing; consequently, chemical processing capacity becomes an essential element of the supply chain.
The fact that Ganfeng is involved in various stages of the lithium industry means that it is affected by changes in demand from electric vehicles and from stationary energy storage. This situation is also in line with a broader trend in the industry whereby companies are aiming to establish closer ties between their raw material resources and battery production.
For those involved in the development of BESS, the availability and price of lithium compounds can have an effect on the economic aspect of obtaining batteries. Even though the price of the cells depends on a number of factors, such as the scale of manufacturing and the type of chemistry, the cost of the raw materials is still a significant factor.
Because of its involvement in lithium processing and the production of battery materials, Ganfeng is one of the companies that should be watched as global demand for storage continues to grow.
3. Umicore
Umicore, which is based in Belgium, is a company concerned with materials technology and recycling and has for a long time been involved in battery materials; its activities consist of producing cathode materials for rechargeable batteries and recovering valuable metals from waste streams associated with batteries.
The cathode is one of the key parts of a lithium-ion battery and its chemical make-up has an effect on energy density, cost, power performance and other operating features. Since different cathode materials are appropriate for different applications, manufacturers of the materials have to meet the changing needs of battery producers.
Umicore has acquired expertise in the area of cathode materials and in the recycling of batteries; recycling is especially important as the battery industry grows since it is possible to return valuable resources to the supply chain by recovering materials from manufacturing waste and from used batteries.
The fact that the company is engaged in this work also shows that there is an increasing concern about reducing the environmental impact of battery production, responsible material sourcing, resource efficiency and recycling becoming important factors for both battery manufacturers and their customers.
In the field of energy storage, improvements in cathode materials can affect both the performance and the cost of batteries employed in renewable energy projects and electricity grids, and recycling may also become more important as the number of batteries that have reached the end of their useful lives increases.
The fact that Umicore has both expertise in materials and the ability to recycle gives it a special position in the global battery materials industry.
4. POSCO Future M
POSCO Future M, which is part of the POSCO Group in South Korea, produces important materials used in rechargeable batteries, such as cathode and anode materials.
The company is involved in two key sections of the lithium-ion battery supply chain; cathode materials are responsible for determining the battery’s capacity, voltage and cost, whereas anode materials have a central role in storing and releasing lithium ions when the battery is being charged and discharged.
By being involved in both areas, POSCO Future M gains access to different aspects of battery manufacturing. The company’s products are aimed at a market in which cell manufacturers are seeking materials that can meet ever more demanding performance and quality requirements.
The company is also taking part in a more extensive initiative aimed at reinforcing battery material supply chains outside of China, since South Korean materials producers play an important role in supplying their country’s battery industry and in supporting international manufacturing networks.
When it comes to stationary energy storage, the choice of materials is determined by the application in mind. In some cases the aim is to keep the cost low and at the same time ensure a long service life, whereas in other instances a higher energy density or certain operating features are required. Because of this, material suppliers have to keep on developing products that are suitable for various battery chemistries and different customer requirements.
POSCO Future M has a significant presence in the global battery materials industry through its cathode and anode businesses.
5. BASF
BASF, a German chemical company, is also a major player in the battery materials sector, concentrating on the materials and technologies used in rechargeable batteries, including the cathode active materials.
Cathode active materials play a central role in the production of lithium-ion batteries. The type of material used has an effect on the energy density, durability, safety features and the manufacturing costs. With battery applications becoming more diverse, material suppliers are attempting to meet the needs of various cell designs and chemistries.
BASF is bringing to this market its expertise in chemical manufacturing and materials research; its work on battery materials is aimed at developing products to meet the changing requirements of electric mobility and energy storage.
The company’s presence is also of relevance to the development of the regional supply chain; battery manufacturers and policy-makers in Europe and North America have been seeking to diversify their sourcing and have been aiming to increase local production capacity for key battery components.
Setting up production of battery materials requires not only the construction of factories but also the necessity of meeting customer qualification standards, keeping up a consistent quality of product, and ensuring a reliable supply of feedstocks.
With the growth of the BESS market, material suppliers like BASF will keep on encountering the opportunities and challenges linked to cost competition, changes in battery chemistry, and the establishment of regional manufacturing networks.
Why Battery Materials Matter for BESS
Although the five companies work in different areas of the battery materials industry, their businesses are linked by the need to provide the materials required for making reliable batteries.
Companies involved in the production of lithium, such as Albemarle and Ganfeng Lithium, help to ensure the availability of essential battery chemicals. Umicore is concerned with cathode materials and recycling, whereas POSCO Future M produces both cathode and anode materials. BASF provides expertise in chemicals and materials, including that relating to cathode active materials.
One should not judge these businesses only by the size of the company since their products are at different stages of the supply chain and each of them encounters different market conditions, production costs and technical requirements.
For BESS, the cost of materials is one of the factors which has an effect on the final price of a storage system. The overall economics are also affected by the type of battery chemistry, the efficiency of cell manufacturing, the system design, the safety equipment, the warranties and the cost of installing the project.
As lithium iron phosphate (LFP) batteries become more widespread in the area of stationary storage, the industry’s demands for materials are changing, and shifts in battery chemistry can affect the demand for certain materials as well as impact investment choices along the supply chain.
Recycling is also an area that is drawing attention to itself. It might be possible to reduce our reliance on resources that have to be extracted anew by recovering useful materials from used batteries and manufacturing waste, although the commercial advantages will depend on the collection systems, the processing costs and the material recovery rates.
The Road Ahead for Battery Materials Companies
The increasing development of renewable energy and battery storage is opening up new possibilities for companies involved in the battery materials supply chain. Yet manufacturers are under pressure to cut costs, enhance resource efficiency and ensure a steady supply of critical raw materials.
Firms that already have in place the necessary processing facilities, dependable supply relationships, and robust research and development programmes are in a good position to meet these demands. At the same time, their future performance will also be determined by commodity prices, changes in battery chemistries, competition, and the speed at which new manufacturing capacity is put into operation.
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