POSCO Future M announced on August 6 that it has reached a significant long-term supply agreement for lithium iron phosphate (LFP) cathode materials with a major domestic battery manufacturer, marking a major step in its LFP business.
This agreement was made in anticipation of the surging demand for energy storage systems (ESS) in North America. POSCO Future M will supply over 190,000 tons of LFP cathode materials to the battery company from next year through 2032. The two companies plan to finalize the contract in the third quarter after discussing specific terms.
A representative from POSCO Future M stated, "In the future, we plan to apply new methods utilizing byproducts from ironmaking processes, such as iron oxide, and lithium sourced from salt lakes in Argentina, to enhance cost competitiveness in LFP cathode production and supply."
LFP batteries, while offering lower output compared to nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA) batteries, are favored for their lower cost and longer lifespan. With the recent surge in electricity demand due to the expansion of data centers for artificial intelligence (AI), the demand for LFP batteries for stable power supply in ESS is increasing.
To ensure timely supply of LFP cathode materials to its customers, POSCO Future M has recently completed the conversion of part of its high-nickel cathode production line at its Pohang plant to LFP production. The company is currently in the process of certifying prototypes for its customers and plans to begin mass production supply by the end of this year.
Meanwhile, POSCO Future M has been advancing its LFP cathode business since December of last year, when it approved the construction of an LFP cathode plant during a board meeting and signed investment contracts with joint venture partners in the same month.
* This article has been translated by AI.
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