POSCO Future M announced on September 22 that it has signed a large-scale supply contract for lithium iron phosphate (LFP) cathodes with SK On. This follows a long-term supply agreement for 190,000 tons of LFP cathodes with domestic battery companies last month, marking a significant entry into the LFP market.
Previously, POSCO Future M has been supplying anode materials to SK On, and this new contract for cathodes is expected to further strengthen their partnership.
The contract, valued at approximately 1.1 trillion won, is set to last for three years from 2027 to 2029, with the possibility of a two-year extension based on mutual agreement.
LFP batteries, while offering lower output compared to nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA) batteries, are known for their cost competitiveness and long lifespan. The demand for LFP batteries is increasing, particularly for energy storage systems (ESS) to ensure stable power supply amid rising electricity needs driven by the expansion of artificial intelligence (AI) data centers. Additionally, the adoption of LFP batteries is growing in the electric vehicle market, especially for budget-friendly models.
POSCO Future M is actively responding to customer demand by adding LFP cathodes to its existing portfolio, which primarily focuses on NCM and NCA. The company has recently completed the conversion of part of its high-nickel cathode production line at its Pohang plant to LFP cathode production and plans to begin mass production by the end of this year. POSCO Future M intends to further expand its production capacity by converting additional lines in response to new orders.
Furthermore, through collaboration within the POSCO Group's supply chain, the company plans to produce and supply LFP cathodes using new methods that leverage lithium from Argentina's salt flats, enhancing cost competitiveness and quality.
In July, the POSCO Group announced its future growth strategy, establishing a 'Triple-core' system encompassing industrial resources (steel), strategic resources (lithium, anode and cathode materials, rare earths), and energy resources (LNG, renewable energy), with a vision to become a key supplier of essential national resources.
A representative from POSCO Future M stated, "In line with the POSCO Group's Triple-core strategy, we plan to enhance our business competitiveness and expand our market presence, aiming to become a global leader in the anode and cathode materials sector, which is a key component of the group's strategic resources."
* This article has been translated by AI.
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