Posted on 22 Jan 2024
South Korea’s Hyundai Motor Group has signed a four-year supply agreement with China’s Ganfeng Lithium, giving the automaker access to a key lithium chemical.
Through this agreement, Ganfeng will supply Hyundai with battery-grade lithium hydroxide products through 31 December 2027. Neither company disclosed the value of the deal, nor the annual supply volume. However, Ganfeng revealed that the actual purchase volume and sales amount remain “subject to the final purchase orders.”
Ganfeng is the largest lithium producer in the world by market capitalisation, Kallanish notes. The company has 11 lithium product manufacturing bases in China, and holds mineral resources in China, Australia, Argentina, Mexico, Mali and Ireland.
In a securities filing, Ganfeng says it reached the agreement with Hyundai after fully considering “the current lithium market situation.” Ganfeng also says the agreement is conducive to profitability and long-term growth, with the deal expected to have an overall positive impact on the mineral supplier.
This development comes days after Hyundai signed a similar supply deal with Shenzhen Chengxin Lithium Group, which will also finish in 2027. As with Ganfeng, the volume and value of this deal is unknown.
With that deal, Hyundai will receive its lithium hydroxide from Chengxin’s production base in China’s Sichuan Province.
These offtake agreements reflect the shift from standard operating practices, in which lithium supply deals would normally be signed by battery manufacturers. However, Hyundai and other carmakers, have recently been taking more steps to strengthen their battery materials supply chain. Back in August, Hyundai signed an agreement with Korea Zinc to secure raw nickel materials.
Neither Ganfeng nor Hyundai responded to Kallanish’s requests for comment at the time of writing.
Source:Kallanish
