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View of POSCO Future M's cathode material plant in Pohang, located in the 4th Yeongil Bay Industrial Complex. / POSCO Future M

POSCO Future M is making a formal entry into the lithium iron phosphate (LFP) cathode material market, having agreed to a long-term supply deal with a domestic battery maker. The company has converted part of its Pohang plant into LFP production lines to respond to growing demand in the North American energy storage system (ESS) market, and is also in ongoing supply discussions with global battery and automaker clients.

POSCO Future M announced on the 6th that it has agreed to supply more than 190,000 tons of LFP cathode material over six years, from next year through 2032, to a major domestic battery maker. The two companies plan to finalize a formal supply contract in the third quarter after working out detailed terms.

The supply deal is aimed at proactively responding to growing demand in the North American ESS market. LFP batteries, which are cheaper and longer-lasting than nickel-cobalt-manganese (NCM) batteries, are seeing expanded adoption in ESS applications and entry-level electric vehicles.

To match its customer's supply needs, POSCO Future M recently converted part of its high-nickel cathode material production line at its Pohang plant into an LFP production line. The company is currently undergoing prototype certification with its customer and plans to begin mass production by the end of this year. It also plans to strengthen cost competitiveness by leveraging its group-wide supply chain, using a new process that incorporates iron oxide — a byproduct of steelmaking — and lithium sourced from salt flats in Argentina to produce LFP cathode material.

The company is also pursuing additional orders. POSCO Future M said it is in discussions with global battery makers and automakers to supply LFP cathode material, adding that supply contract negotiations with another major client are in their final stages.

The company is also expanding its anode material business. In March of this year, POSCO Future M signed a roughly 1 trillion won long-term supply contract with a global automaker for artificial graphite anode material, and is investing about 357 billion won to build a new artificial graphite anode material plant in Vietnam.

Separately, in May, C&P New Materials Technology — a joint venture between POSCO Future M and Fine-CNGR — began construction on an LFP cathode material plant in the 4th Yeongil Bay General Industrial Complex in Pohang. The plant is targeting mass production by 2027, with plans to expand capacity to as much as 50,000 tons per year.

                                                                                                          Lee Seo-yeon