With this contract, now supplies cathode and anode materials to all three Korean battery makers… strengthening its foundation for mid- to long-term growth

Covers three years from next year through 2029, extendable by two more years upon mutual agreement

POSCO Future M (CEO EOM Gi Chen) has signed a large-scale supply contract with SK On for LFP (lithium iron phosphate) cathode materials.

Hard on the heels of last month’s long-term agreement to supply 190,000 tons of LFP cathode materials to a Korean battery maker, the company has now secured another major contract as it moves into the LFP market in earnest.

POSCO Future M has been working with SK On as a supplier of anode materials and plans to strengthen the partnership further through this contract, its first to supply SK On with cathode materials. The contract also means POSCO Future M now supplies cathode and anode materials to all three Korean battery makers, broadening its customer portfolio and putting its mid- to long-term growth on an even firmer foundation.

The contract, signed on the 22nd, is worth approximately KRW 1.1 trillion over three years, from 2027 through 2029, and can be extended by an additional two years upon agreement between the two companies.

While LFP batteries have lower power output than ternary batteries such as NCM (nickel-cobalt-manganese) and NCA (nickel-cobalt-aluminum), their strengths lie in competitive pricing and a long lifespan. With power demand recently surging due to the build-out of AI data centers, among other factors, demand for LFP batteries used in ESS is growing to ensure a stable power supply. LFP batteries are also increasingly being adopted in the electric vehicle market, particularly in entry-level models.

POSCO Future M is actively responding to customer demand by adding LFP cathode materials to its existing portfolio centered on ternary (NCM and NCA) materials. The company recently completed converting part of its high-nickel cathode material production lines at the Pohang plant to LFP cathode material production, and is set to begin mass-production supply from the end of this year. POSCO Future M plans to continue expanding production capacity by converting more lines as further orders come in.

Going forward, the company also plans to produce and supply LFP cathode materials with further improved cost competitiveness and quality by applying a new process that uses lithium from salt lakes in Argentina, drawing on raw material supply chain cooperation across POSCO group.

POSCO Future M continues to hold discussions with major battery makers and automakers on supplying cathode and anode materials, backed by a diverse product portfolio and by a supply chain and technological capabilities that can navigate global trade regulations. The company is also stepping up the expansion of its production capacity. Its moves include a KRW 1 trillion long-term supply contract for synthetic graphite anode materials, signed with a global automaker in March this year, and plans to invest approximately KRW 357 billion in a new synthetic graphite anode material plant in Vietnam. A plant to process spherical graphite, an intermediate material for natural graphite anode materials, is under construction at the Saemangeum National Industrial Complex in Jeonbuk and is scheduled to begin trial operation in early 2027, with completion and full-scale mass production planned for the second half of the year.

In July, POSCO group announced its future growth strategy, outlining a vision to build a Triple-Core system and become a “national supplier of critical resources.” The system spans industrial resources (steel), strategic resources (such as lithium, cathode and anode materials, and rare earths), and energy resources (LNG and renewable energy).

In line with this strategy, POSCO Future M aims to build on its unrivaled technology to strengthen its business competitiveness and expand its markets, and to emerge as a global leader in the cathode and anode materials business, one of the pillars of the group’s strategic resources.

A view of POSCO Future M’s Pohang cathode material plant, located in Yeongil Bay Industrial Complex 4, Pohang. The company recently completed converting part of its high-nickel cathode material production lines at the Pohang plant to LFP cathode material production, and plans to continue expanding production capacity by converting more lines as customer orders come in.

Diversifies portfolio to include LMR and LFP in addition to existing ternary high-nickel cathode materials

POSCO Future M signed an MOU with CNGR on the 8th at the POSCO Center in Daechi-dong for pursuing the LFP (lithium-iron-phosphate) cathode material business.

CNGR’s Korean subsidiary, FINO, also participated in this MOU. The three companies will cooperate on the construction of LFP cathode material production facilities for ESS (Energy Storage System) and joint marketing, as per the agreement.

POSCO Future M signed a joint venture agreement (JVA) with CNGR in 2023 to cooperate on precursor production and established C&P Advanced Technology* the following year. This MOU aims to rapidly expand the scope of cooperation from precursor production to LFP cathode materials at the C&P Advanced Technology.

* C&P Advanced Technology ownership structure: CNGR 51%, FINO 29%, POSCO Future M 20%

LFP batteries have a lower output compared to ternary batteries, such as NCM (nickel-cobalt-manganese), but offer advantages of low cost and long lifespan. Recently, they have been increasingly applied in various fields, including ESS and entry-level electric vehicles.

In particular, ESS does not have stringent space and output requirements compared to electric vehicles, and it requires a long lifespan; therefore, the preference for LFP batteries has been increasing even more recently. According to the International Energy Agency (IEA), LFP batteries held approximately 80% market share in the global ESS market as of 2023.

POSCO Future M is diversifying its cathode material product portfolio to respond more actively to changing customer needs. POSCO Future M primarily produces high-nickel NCMA (nickel-cobalt-manganese-aluminum) and NCA (nickel-cobalt-aluminum) for premium electric vehicles, and completed development of LMR (lithium-manganese-rich) cathode materials for entry and standard-grade electric cars in the first half of this year. Additionally, since March, the company has been pursuing research and development by organizing a task force (TF) jointly with POSCO Holdings Future Technology Research Institute for the commercialization of high-density LFP cathode materials with higher energy density compared to general-purpose LFP cathode materials.

From now on, POSCO Future M plans to continuously expand its global customer base in the automotive and battery industries, leveraging diverse cathode and anode material product portfolios, strengthened manufacturing capabilities, and supply chain competitiveness at the POSCO Group level.

▲ POSCO Future M signed an MOU with CNGR and FINO for LFP cathode material business development on the 8th at the POSCO Center in Daechi-dong. From left: CNGR Vice Chairman Zhu Zongyuan, POSCO Future M Energy Materials Business Division Head Yoon Tae-il, FINO CEO Li Bin.