POSCO Future M (003670) has finally succeeded in breaking into the lithium iron phosphate (LFP) cathode materials market, a sector that has been virtually monopolized by Chinese companies. On the 6th, POSCO Future M announced it had reached a large-scale, long-term supply agreement for LFP battery cathode materials with a major South Korean battery manufacturer. This marks the first time POSCO Future M has secured an LFP cathode supply contract.<\/p>\n
Under the agreement, POSCO Future M will supply over 190,000 tons of LFP cathode materials to the battery maker over six years, from next year through 2032. The identity of the counterparty remains undisclosed due to a non-disclosure agreement (NDA), but industry observers believe it is highly likely one of South Korea’s three major battery manufacturers: LG Energy Solution, Samsung SDI (006400), or SK On. All three companies are developing LFP batteries. Notably, Samsung SDI is set to begin production of LFP batteries for ESS at its joint venture plant with Stellantis in Indiana, USA, starting this October. The two parties will negotiate specific contract terms and plan to sign a formal supply agreement within the third quarter of this year.<\/p>\n
This supply agreement is a preemptive move to address the explosive demand in the North American energy storage system (ESS) market. While LFP batteries offer lower power output compared to ternary batteries such as nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA), their superior price competitiveness and longer lifespan are driving rapid demand growth in the ESS market. With electricity demand surging recently due to the expansion of artificial intelligence (AI) data centers, demand for LFP batteries for ESS to ensure stable power supply is expanding further. Adoption of LFP batteries is also increasing in the electric vehicle market, particularly for entry-level models.<\/p>\n
To respond promptly to customer demand, POSCO Future M recently completed the conversion of part of its high-nickel cathode production line at its Pohang plant into a dedicated LFP cathode line. The company is currently undergoing customer prototype certification and plans to begin full-scale mass production and supply by the end of this year.<\/p>\n
Going forward, POSCO Future M intends to maximize cost competitiveness by actively leveraging the POSCO Group’s value chain. The strategy is to counter the low-price offensive of Chinese LFP cathode materials by applying a novel process that combines iron oxide, a byproduct of the steelmaking process, with lithium secured from Argentine salt lakes.<\/p>\n
POSCO Future M is also in the final stages of negotiating LFP cathode supply contracts with other major global clients. A company official stated, “Supply contracts for LFP cathode materials with other major clients are currently in their final stages,” adding, “We plan to gradually expand our LFP cathode production capacity (CAPA) in line with additional order wins.”<\/p>\n
Separately, CNP New Material Technology, a joint venture between POSCO Future M, China’s CNGR, and Pino, commenced construction of an LFP cathode factory in May at the Yeongil Bay 4 General Industrial Complex in Pohang. The plant targets mass production by 2027, with plans to gradually expand capacity up to 50,000 tons.<\/p>\n
Leveraging its supply chain and technological capabilities to navigate global trade regulations, POSCO Future M continues to discuss cathode and anode material supply with global battery and automaker clients. In March, the company signed a long-term supply contract for synthetic graphite anode materials worth 1 trillion won (approximately $702.2 million) with a global automaker, and is also pursuing the construction of a new synthetic graphite anode plant in Vietnam with an investment of approximately 357 billion won (approximately $250.7 million).<\/p>\n
In a report on the 5th, Park Hyung-woo, an analyst at SK Securities, analyzed, “From 2027, LFP precursors and anode materials will become bottlenecks,” adding, “POSCO Future M is the only company in South Korea capable of resolving both bottlenecks simultaneously.” He further explained, “Real demand for LFP cathodes for the North American ESS market will take off in earnest from 2027, but new CAPA breaking ground now cannot come online by that time, making the conversion of existing ternary lines the only physically viable response. The company has been preparing for production efficiency improvements and precursor procurement.”<\/p>\n
With this LFP cathode supply agreement, POSCO Future M is seen as having established a foothold to expand its business portfolio, currently centered on high-nickel ternary cathodes, into the ESS and entry-level EV markets. The move is particularly significant as it preempts demand from battery makers seeking to build non-Chinese LFP cathode supply chains amid global trade regulatory environments, including the U.S. Inflation Reduction Act (IRA).<\/p>\n","protected":false},"excerpt":{"rendered":"POSCO Future M (003670) has finally succeeded in breaking into the lithium iron phosphate (LFP) cathode materials market,…\n","protected":false},"author":2,"featured_media":111479,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[380],"tags":[57243,57242,4259,43475,21023,442,2441,57244,40074],"class_list":["post-111478","post","type-post","status-publish","format-standard","has-post-thumbnail","category-posco","tag-argentine-lithium","tag-cnp-new-material-technology","tag-lfp-cathode-materials","tag-north-american-ess-market","tag-pohang-plant","tag-posco","tag-posco-future-m","tag-synthetic-graphite-anode-materials","tag-ternary-batteries"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/111478","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=111478"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/111478\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/111479"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=111478"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=111478"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=111478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}