TAIPEI - Taiwan News — An opinion column in the Korea Herald has warned that South Korea's recent urea crisis is just a “trailer” to the upcoming full-length “real movie” as China starts meting out further supply chain pain.
The report suspects the EV battery industry will be the next victim and that a “weaponization of metals” like lithium and manganese will cripple South Korean manufacturers.
Analysts cited by Korea Herald say the country’s biggest EV manufacturers are all overly reliant on China for supplies.
“Depending on how strongly Beijing weaponizes those metals, Korean battery firms’ dominance in the global market can fade rapidly,” Kim Hyun-so said.
China is tightening its grip on supplies and forming anti-competitive cabals to further consolidate its stranglehold on the minerals. In October 2021, for instance, a state-backed initiative named the “Manganese Innovation Alliance” brought dozens of Chinese suppliers under one roof and the price of the element has soared since.
The same is likely to happen to rare earth metals next. In September this year, Chinese authorities announced they would merge three domestic producers into a single gargantuan state-owned enterprise.
“China’s overwhelming dominance over key metal resources is a ticking time bomb that can always explode,” Kim said.
Taiwan’s government is also worried about the knock-on effects of China’s stranglehold on these resources. On Tuesday (Nov. 30) Taiwan’s Ministry of National Defense (MND) admitted Taiwan's anti-aircraft mobile missile launchers would be quite useless if they did not have a stable supply of urea, which acts as a catalyst conversion agent.
Analysts predict the shift toward renewable energy will cause demand for these metals China dominates to explode, giving Beijing greater economic leverage. China will likely cement its position into the future with further investment forays into Africa while also probing new projects in neighboring Afghanistan.