LG Chem Teams Up with Sinopec of China to Jointly Develop Core Materials of Sodium-Ion Battery

LG Chem CEO and Vice Chmn. Shin Hak-cheol and Sinopec Chmn. Hou Qijun applaud as both sides signed a deal to jointly develop core materials of the sodium-ion battery at LG Twin Tower in Yeouido, Seoul, Oct. 30. (Photo: LG Chem)

LG Chem is joining forces with Sinopec of China to jointly develop next-generation battery materials. LG Chem said on Nov. 4 the company struck a deal with Sinopec to jointly develop core materials of the sodium-ion battery on Oct. 30.

Sinopec is one of China’s largest integrated energy and chemical companies, specializing in areas, encompassing petroleum/gas exploration & development, refinery, chemical, new energy and new materials businesses.

Under the agreement, both sides plan to jointly develop anode and cathode materials of the sodium-ion battery, build a stable supply chain and secure unit price competitiveness.

The sodium-ion battery has strengths, such as outstanding access to resources compared to the lithium-ion battery and less low-temperature business performance lose compared to the lithium-ion phosphate (LFP).

The sodium-ion battery has been highlighted as a next-generation battery technology in the global market due to higher safety and charging speed than the conventional lithium-ion battery.

Market survey organizations said the size of the sodium-ion battery is predicted to surge from 10GWh in 2025 to 292GWh in 2034 with an annual average growth rate of some 45 percent.

China is expected to emerge as a major production center, which accounts for more than 90 percent of the world’s sodium-ion battery productions by 2030.

LG Chem and Sinopec plan to diversify business models of the sodium-ion battery, targeting Chinese and global ESS and general-type EV markets, through their joint development and expand the scope of cooperation to future eco-friendly energy and value-added material sectors.

LG Chem CEO and Vice Chmn. Shin Hak-cheol said, “LG Chem, a global battery material leader, has supplied differentiated solutions to customers in the global battery market, and we will continue to develop next-generation battery materials timely through cooperation with Sinopec and strengthen our business portfolio corresponding to customers’ future strategies.”

Sinopec Chmn. Hou Qijun said, “Sinopec’s corporate vision is to become a clean energy and premium chemical global leader, and cooperation in the development of sodium-ion battery materials is expected to contribute to ramping up both companies’ technology and market competitiveness and spurring energy transition and sustainable development.”

LG Chem Announces Q3 Financial Results

“In the third quarter, we generated improved earnings through growth across our diversified portfolio, including a turnaround in petrochemicals, the receipt of an advance payment from a licensing-out agreement in Life Sciences, and stronger results at LG Energy Solution, together with cost-reduction initiatives across the entire value chain.”

“While the operating environment is expected to remain challenging amid subdued global demand, we will accelerate our shift toward a higher-value, higher-margin portfolio and overcome the current headwinds by advancing new future businesses and optimizing operations.”

LG Chem announced on the 31st that it recorded consolidated revenue of KRW 11.1962 trillion and operating profit of KRW 679.7 billion for the third quarter of this year.

Compared to the same period last year, revenue decreased by 11.3% while operating profit increased by 38.9%. Quarter on quarter, revenue declined by 1.9%, and operating profit rose by 42.6%.

CFO Cha Dong-seok stated, “In the third quarter, we generated improved earnings through growth across our diversified portfolio, including a turnaround in petrochemicals, the receipt of an advance payment from a licensing-out agreement in Life Sciences, and stronger results at LG Energy Solution, together with cost-reduction initiatives across the entire value chain.”

He added, “While the operating environment is expected to remain challenging amid subdued global demand, we will accelerate our transition toward a higher-value, higher-margin portfolio and overcome the current headwinds by advancing new future businesses and optimizing operations.”

The detailed third-quarter performance and fourth-quarter outlook by business division are as follows.

The Petrochemicals Company recorded revenue of KRW 4.4609 trillion and an operating profit of KRW 29.1 billion.

Although sales declined quarter on quarter due to the impact of U.S. tariffs and softer demand in downstream industries, the Company returned to profit on the back of improved product spreads from lower feedstock prices and continued cost-reduction efforts.

In the fourth quarter, profitability is expected to come under pressure from continued weak global demand, narrower spreads, and lost production opportunities associated with scheduled maintenance at the Daesan plant.

The Advanced Materials Company posted revenue of KRW 838.2 billion and an operating profit of KRW 7.3 billion.

Shipments of battery materials declined as customers maintained conservative inventories following the end of U.S. EV purchase incentives.

Still, sales and profitability in electronic and engineering materials remained solid thanks to a higher mix of high-value-added products.

In the fourth quarter, revenue is expected to decline due to year-end inventory adjustments by battery-materials customers and the seasonal off-peak period for electronic materials.

The Life Sciences Company recorded revenue of KRW 374.6 billion and an operating profit of KRW 100.6 billion.

Revenue and profitability increased with the receipt of the remaining upfront payment from the licensing-out of a rare obesity treatment.

In the fourth quarter, profitability is expected to decline due to a base effect from this one-off licensing income and higher R&D expenses.

The subsidiary LG Energy Solution posted revenue of KRW 5.6998 trillion and an operating profit of KRW 601.3 billion.

Although EV demand remained weak following the end of U.S. purchase incentives, earnings improved on increased shipments of North American ESS and new small-format batteries, together with company-wide cost-reduction efforts.

In the fourth quarter, while policy-driven softness in North American EV demand and intensified price competition in Europe is expected to persist, the company will focus on securing orders with a refreshed product lineup and on establishing a leading market position through proactive responses to North American ESS demand.