POSCO Future M Reaches First Large-Scale, Long-Term LFP Supply Agreement With Battery Company

Agrees to Supply Over 190,000 Tons for Six Years Starting Next Year
Pohang Plant Production Line Converted from High-Nickel to LFP

On August 6, POSCO Future M announced that it has reached an agreement with a leading domestic battery company for a large-scale, long-term supply of lithium iron phosphate (LFP) cathode materials.

A panoramic view of the Posco Future M cathode material factory in Yeongilman 4 Industrial Complex, Pohang. Posco Future M is currently converting part of the Pohang ternary high-nickel cathode material production line into an LFP production line to certify customer prototypes. Posco Future M

The two companies plan to sign an official contract in the third quarter after finalizing specific terms. If the agreement is concluded, POSCO Future M will supply the battery company with more than 190,000 tons of LFP cathode materials over six years, from next year until 2032.

This agreement was made as a proactive response to the surging demand for energy storage systems (ESS) in North America. Going forward, POSCO Future M plans to further strengthen cost competitiveness by producing and supplying LFP cathode materials using new manufacturing processes that utilize by-products from steelmaking, such as iron oxide, and lithium secured from salt lakes in Argentina, based on cooperation at the POSCO Group level.

In addition, POSCO Future M is in the final stages of LFP cathode material supply contracts with other major clients and plans to expand its LFP cathode material production capacity in line with the increased orders.

While LFP batteries have lower output compared to ternary batteries such as nickel cobalt manganese (NCM) and nickel cobalt aluminum (NCA), they offer the advantages of lower cost and longer lifespan. With rapid increases in electricity demand, including the expansion of data centers for artificial intelligence (AI), demand for LFP batteries for ESS is growing to ensure stable power supply. LFP battery adoption is also on the rise in the electric vehicle market, especially in entry-level models.

To supply LFP cathode materials to its customers in a timely manner, POSCO Future M has recently converted part of the high-nickel cathode material production line at its Pohang plant into an LFP cathode production line. Customer certifications of prototypes are currently underway, and mass production supply is scheduled to begin at the end of this year.

Furthermore, leveraging its supply chain and technological capabilities to respond to trade regulations in various countries, POSCO Future M is continuing negotiations to supply both cathode and anode materials to global battery and automaker companies. In March of this year, POSCO Future M signed a large-scale, long-term supply contract worth 1 trillion won for synthetic graphite anode materials with a global automaker, while also working to expand production capacity by investing approximately 357 billion won in a new synthetic graphite anode plant in Vietnam.

This content was produced with the assistance of AI translation services.