LG Chem is expected to collaborate with China's GEM, a key partner of EcoPro, to produce cathode materials for LG Energy Solution's next-generation 46-series cylindrical batteries. This supply chain move signals deepening China-Korea battery material integration, directly impacting overseas buyers of NCMA precursors and high-nickel cathode materials.
Supply-chain structure
GEM's NCMA precursor, with nickel content above 90%, was shipped from its Jingmen plant on 21 August. The precursor is destined for a global company's supply chain, likely LG Chem, which then supplies cathode materials to LG Energy Solution for 4680 (46mm diameter, 80mm length) cylindrical batteries. The chain runs: GEM (precursor) → LG Chem (cathode) → LG Energy Solution (battery).
Production capacity and buyer relevance
GEM's Jingmen plant has a monthly NCMA precursor capacity of 2,000 tonnes, or 24,000 tonnes annually, enough for about 400,000 EVs. Jingmen is GEM's key export hub, already supplying products to South Korea. In April, high-nickel NCM precursors from this plant were delivered to EcoPro. LG Chem is listed as a customer in GEM's business report, alongside EcoPro and Chinese cathode makers.
What buyers should watch
LG Chem confirmed it sources precursors from Chinese suppliers beyond its Korea Precursor joint venture with Korea Zinc, stating supply is stable. However, LG Chem declined to confirm whether GEM is the specific supplier for NCMA precursors used in 4680 batteries. Cosmo Advanced Materials, which also supplies NCMA cathodes to LG Chem, uses precursors from other Chinese firms, not GEM.
Compliance and logistics signals
Despite tightening regulations on Chinese materials, domestic Korean cathode makers continue to rely on Chinese precursors, which control over 80% of the global market. LG Chem, L&F, and POSCO Future M all maintain Chinese precursor supply chains. L&F sources mostly from CNGR, while POSCO Future M produces some precursors in-house but also uses Huayou Cobalt and CNGR. This dependence is unlikely to diminish soon.
China sourcing context
Chinese companies like GEM, CNGR, and Huayou Cobalt dominate the global precursor market due to raw material sourcing advantages and accumulated mass-production experience. LG Chem's potential deal with GEM underscores the strategic importance of Chinese suppliers for Korean battery material makers, even as they attempt to localize precursor production. Overseas buyers should monitor this dynamic for pricing and supply stability.
Source: Read the original report | Published: August 05, 2025