“POSCO Future M to begin mass production of LFP by year-end... cathode shipments to top 100,000 tonnes next year” — IBK Investment & Securities

[Financial News] POSCO Future M will broaden its battery materials business growth drivers by launching mass production of lithium iron phosphate (LFP) cathode materials by year-end. It is converting existing ternary cathode production lines to secure initial supply capacity and respond to the expanding energy storage system (ESS) market. Following a recovery in cathode shipments in the third and fourth quarters, additional volumes in the fourth quarter are expected to accelerate top-line growth from next year.
According to a report by IBK Investment & Securities on the 4th, POSCO Future M has completed the conversion of existing ternary production lines at its Pohang plant and is set to begin initial mass production and shipments of LFP cathode materials in the fourth quarter. The converted line currently has an annual production capacity of about 20,000 tonnes.
The company plans to convert additional existing lines in Pohang and increase its in-house capacity for LFP to up to 105,000 tonnes. It also plans to use the capacity of up to 50,000 tonnes at its joint venture (JV) with C&P Advanced Materials to meet volumes under long-term supply contracts. IBK Investment & Securities forecast that total cathode material shipments will exceed 100,000 tonnes next year, with LFP accounting for at least half.
The expansion of the LFP business is driven by rising demand for batteries used in ESS. IBK Investment & Securities estimated that potential demand for LFP cathode materials for ESS from Korea’s three battery makers would rise from 230,000 tonnes in 2027 to 350,000 tonnes in 2030. The estimates assume that all planned battery production capacity is brought online.
The existing cathode materials business also showed signs of recovery. POSCO Future M’s third- and fourth-quarter revenue rose 22.9% from the previous quarter to KRW 834.8 billion, while operating profit increased 207.8% to KRW 82.1 billion. Cathode material revenue grew 44.3% to KRW 432.3 billion, and shipments rose 14% to 11,000 tonnes. The dollar-denominated average selling price (ASP) also rose by double digits, and the operating margin in the energy materials segment improved to 11.3%. Although compensation related to customer volume shortfalls was reflected in earnings, a higher sales share of N87, a high-value-added product, and a recovery in deferred volumes also contributed to the improvement.
IBK Investment & Securities expected fourth-quarter cathode material shipments to rise to about 16,000 tonnes. It forecast 2027 annual revenue of KRW 4.019 trillion and operating profit of KRW 205 billion, up 29.7% and 38.4%, respectively, from this year’s estimates.
POSCO Future M is also working to expand its supply chain in anode materials. Phase 1 production and sales at its artificial graphite production hub in Vietnam are targeted to begin in the second half of 2027. The company also plans to develop cathode materials for sodium-ion batteries (SIBs), hard-carbon anode materials, and all-solid-state battery materials in parallel to build a foundation for medium- to long-term growth.
[email protected] Kim Dong-ho Reporter