Agrees to supply more than 190,000 tons of LFP cathode materials to a major Korean battery maker over six years starting next year… preemptive response to surging North American ESS demand
Pohang plant production lines converted from high-nickel to LFP to meet customer demand… prototype certification underway, with mass production supply set to begin by the end of the year
Continuing supply negotiations with global battery makers and automakers based on supply chain and technological capabilities to address trade regulations
POSCO Future M officially launched its LFP cathode material business on the 6th, reaching a large-scale, long-term supply agreement with a major Korean battery maker for lithium iron phosphate (LFP) cathode materials.
The agreement, reached to preemptively address surging North American ESS demand, will see POSCO Future M supply more than 190,000 tons of LFP cathode materials to the battery maker over six years, from next year through 2032. The two companies plan to finalize the terms and sign a formal contract in the third quarter.
Leveraging POSCO Group-level collaboration, the company plans to produce and supply LFP cathode materials with enhanced cost competitiveness by applying new processes that use steelmaking by-products, such as iron oxide, and lithium sourced from salt lakes in Argentina.
POSCO Future M is in the final stages of negotiating LFP cathode material supply contracts with other major customers and plans to expand production capacity in line with additional orders.
While LFP batteries have lower power output than ternary batteries such as NCM (nickel-cobalt-manganese) and NCA (nickel-cobalt-aluminum), they offer the advantages of lower cost and longer lifespan. With power demand surging recently due to the expansion of AI data centers, demand for LFP batteries for ESS applications is growing to ensure a stable power supply. LFP battery adoption is also increasing in the electric vehicle market, particularly for entry-level models.
To ensure the timely supply of LFP cathode materials to customers, POSCO Future M recently completed the conversion of portions of its high-nickel cathode material production lines at the Pohang plant into LFP cathode material production lines. The company is currently undergoing prototype certification with customers and plans to begin mass production supply by the end of this year.
The company is also continuing negotiations for cathode and anode material supply with global battery makers and automakers, leveraging its supply chain and technological capabilities to navigate trade regulations across various countries. In March, the company signed a large-scale, long-term supply contract worth approximately 1 trillion won with a global automaker for synthetic graphite anode materials, and is investing approximately 357 billion won to build a new synthetic graphite anode material plant in Vietnam to expand production capacity.
Separately, CNP New Material Technology — a joint venture between POSCO Future M and FINO-CNGR — began construction of an LFP cathode material plant at Pohang’s Yeongil Bay General Industrial Complex 4 in May, targeting mass production in 2027. The plant will expand production capacity in phases to a maximum of 50,000 tons.
▲ Aerial view of POSCO Future M’s Pohang cathode material plant located in Yeongil Bay Industrial Complex 4, Pohang. POSCO Future M is currently undergoing customer certification for prototypes after converting portions of its ternary high-nickel cathode material production lines in Pohang to LFP production lines.