POSCO Future M Wins KRW 1.0742 Trillion LFP Cathode Material Order from SK On; Additional Orders Still Possible

[Financial News] POSCO Future M has announced its first official LFP cathode material order. On the 22nd, it disclosed a KRW 1.0742 trillion supply contract with SK On covering three years from 2027 to 2029. Based on a selling price of KRW 14,000 per kilogram, the contract covers 77,000 metric tons in total, or 26,000 metric tons annually. DS Investment & Securities maintained its buy rating on POSCO Future M and set a target price of KRW 290,000.
Choi Tae-yong, a researcher at DS Investment & Securities, said on the 23rd, "The 190,000 metric tons agreed with a Korean battery maker in August are expected to be finalized under a definitive contract during the third or fourth quarter. Combined, the two contracts amount to an annual average of 57,000 metric tons, exceeding the 44,000 metric tons in cathode material sales projected for 2025." He added, "With LG Energy Solution and Samsung SDI as existing cathode material customers and SK On now added, POSCO Future M will supply all three major Korean battery makers in cathode materials, as it already does in anode materials through existing supply agreements with all three."
According to DS Investment & Securities on the 23rd, SK On's LFP cathode material procurement contracts total KRW 1.2359 trillion, including KRW 161.7 billion under a contract with another supplier. The latest contract is an estimated-volume agreement with no minimum-purchase clause.
The supply volume will be determined by SK On's success in securing orders for ESS projects in the United States, making SK On's order disclosures an indicator for verifying its performance. The two suppliers' combined contracted volume of 12 GWh per year is three times SK On's confirmed orders of 3 to 4 GWh and includes orders currently under negotiation.
Samsung SDI, a candidate for additional orders, has increased its potential North American ESS CAPA, or production capacity, to as much as 66 GWh through the sole operation of Synergy Cells. Samsung SDI's additional procurement would primarily be channeled through C&P Advanced Materials, a joint venture in which it holds a 20% stake. The possibility also remains that POSCO Future M itself could receive a direct order.
Choi said, "POSCO Future M's 55,000 metric tons of ternary cathode material capacity in Pohang would become 87,000 metric tons if converted to LFP, so it can handle additional orders without expanding capacity." He added, "For the 2027 estimates, only 60% of the volumes under the two contracts (190,000 metric tons plus the SK On contract) has been reflected, leaving the remaining 40% as an upside factor." 
 


[email protected] Kang Gu-gwi Reporter