POSCO Future M Signs LFP Cathode Materials Supply Deal Worth Approximately KRW 1.1 Trillion with SK On—"Completing Full-Supply System for All Three Domestic Battery Makers"

[Financial News] POSCO Future M is expanding its foothold in the market by signing a large-scale lithium iron phosphate (LFP) cathode materials supply deal with SK On. Just over a month after agreeing to a long-term supply of 190,000 metric tons of LFP cathode materials with a domestic battery maker, the company has secured another major order, accelerating the expansion of its supply chain.
POSCO Future M announced on the 22nd that it had signed a contract with SK On to supply LFP cathode materials worth KRW 1.07 trillion over three years, from 2027 through 2029. The agreement also includes a provision allowing the contract period to be extended by two additional years through mutual consultation. POSCO Future M has primarily supplied anode materials to SK On, but the latest deal expands their cooperation to include cathode materials. With this contract, POSCO Future M has become the only materials company supplying both cathode and anode materials to all three domestic battery makers.
LFP batteries offer lower output than ternary products that use nickel and cobalt, but they have the advantages of lower costs and longer lifespans. Demand for LFP batteries for energy storage systems (ESS) is growing amid a surge in power demand driven by the expansion of AI data centers. Adoption is also spreading in the electric vehicle market, particularly in lower-priced models, leading to an increase in related orders.
POSCO Future M is expanding its ability to respond to customer needs by adding LFP materials to its previously high-nickel-focused product lineup. The company has completed the conversion of some high-nickel cathode materials production lines at its Pohang plant for LFP production and plans to begin full-scale mass production and supply at the end of this year. It plans to gradually increase the number of converted lines and expand production capacity in line with additional orders. Using POSCO Group's raw material supply chain, the company also plans to process lithium secured from salt flats in Argentina with a new method and produce LFP cathode materials that improve both costs and quality.
The company is also continuing supply discussions with major battery makers and automakers, leveraging a supply chain capable of responding to global trade regulations and a diversified product portfolio. In March this year, it signed a long-term contract worth KRW 1 trillion to supply artificial graphite anode materials to an overseas automaker. It is also building a new artificial graphite anode materials plant in Vietnam at a cost of approximately KRW 357 billion. In the Saemangeum National Industrial Complex in Jeollabuk-do, the company is constructing a spherical graphite processing plant for an intermediate material used in natural graphite anode materials. Trial operations are scheduled to begin in early 2027, followed by completion and mass production in the second half of the year.
In July, POSCO Group announced a future growth strategy centered on a 'Triple Core' system built around industrial resources such as steel, strategic resources such as lithium, cathode and anode materials, and rare earths, and energy resources such as LNG and renewable energy. The group presented a blueprint for strengthening its position as a core resource supplier.
A POSCO Future M official said, "In line with the group's strategy, we plan to expand our business areas based on our technological competitiveness and become a global leader in the cathode and anode materials businesses."
[email protected] Kim Dong-chan Reporter