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.

Accelerating business development with the completion of the joint venture agreement following last week’s board approval

POSCO Future M is accelerating its LFP cathode material business to meet rapidly growing demand in the ESS market for mid- to low-cost battery materials.

POSCO Future M has signed a joint venture agreement (JVA) with CNGR and FINO, CNGR’s Korean subsidiary, for lithium iron phosphate (LFP) cathode materials. The signing ceremony, held on the 23rd at FINO’s headquarters in Anyang, Gyeonggi-do Province, was attended by Tae-il Yoon, Head of POSCO Future M’s Energy Materials Marketing Division, Liu Xingguo, Vice President of CNGR, Zhu Zongyuan, Vice President of CNGR, Dong-hwan Kim, CEO of FINO, and Dai Zhufu, CEO of CNP New Material Technology.

POSCO Future M established CNP New Material Technology in 2024 as a joint venture with CNGR and FINO to strengthen collaboration in the secondary battery materials business with CNGR and has continued discussions since then. Following board approval of the proposal on the 15th to build an LFP cathode material plant through this joint venture, the company completed the contract signing on the 23rd, accelerating its LFP cathode material business.

With the joint venture agreement in place, POSCO Future M will proceed with the construction of an LFP cathode material plant at Pohang’s Yeongil Bay General Industrial Complex 4. The company aims to break ground in 2026 and begin mass production in 2027, with plans to expand its annual capacity to a maximum of 50,000 tons starting with this investment.

While LFP batteries have lower output than ternary batteries, their cost and lifespan advantages have driven increased adoption across various applications, including ESS and entry-level electric vehicles. This agreement enables POSCO Future M to fully launch its LFP cathode material business to respond to rapidly growing market demand and to strengthen collaboration with CNGR and FINO across all business areas, including production, technology, and marketing.

Separately from this agreement, POSCO Future M plans to convert portions of its existing high-nickel product production lines at the Pohang cathode material plant into LFP cathode material production lines to secure early entry into the LFP market, with supply beginning in the second half of 2026.

▲POSCO Future M signed a joint venture agreement (JVA) with CNGR and FINO for LFP cathode materials on the 23rd. (From left: Dong-hwan Kim, CEO of FINO; Tae-il Yoon, Head of POSCO Future M’s Energy Materials Marketing Division; Zhu Zongyuan, Vice President of CNGR; Dai Zhufu, CEO of CNP New Material Technology)