Lee Gyu-lee is a business writer at The Korea Times, focusing primarily on IT & telecommunications, the Ministry of Trade, Industry and Energy and KOTRA. Prior to this, she has covered a wide range of cultural news, from film, television and K-pop to lifestyle and fashion.
POSCO Future M to supply LFP cathode materials to major battery maker
POSCO Future M's LFP cathode material plant in Pohang, North Gyeongsang Province / Courtesy of POSCO Future M
By Lee Gyu-lee
POSCO Future M has agreed to supply a major Korean battery maker with a large volume of lithium iron phosphate (LFP) cathode materials under a long-term deal, marking its full-fledged entry into the growing LFP market.
Under the agreement reached Thursday, POSCO Future M will supply more than 190,000 metric tons of LFP cathode materials over six years from 2027 through 2032. It did not disclose the battery maker’s name due to contractual obligations. The two companies plan to finalize the terms and sign a formal contract in the third quarter.
The deal comes as demand for energy storage systems (ESS) is surging in North America, driven by the rapid expansion of power-hungry artificial intelligence data centers.
POSCO Future M plans to improve the cost competitiveness of its LFP cathode materials by using raw materials sourced through POSCO Group, including iron oxide from its steelmaking process and lithium from Argentina.
The company is also in the final stages of negotiations with other major customers for additional LFP cathode material supply deals and plans to expand production capacity as new orders come in.
LFP batteries generally offer lower performance than nickel-based batteries but are cheaper and have longer lifespans. Their use is growing in ESS and more affordable electric vehicles as demand increases for lower-cost battery technologies.
To meet growing demand, POSCO Future M recently converted part of a cathode material production line at its Pohang plant to produce LFP materials. The company is currently conducting customer certification for prototypes and plans to begin mass production by the end of this year.
POSCO Future M is also pursuing supply deals with global battery and automakers as it expands its global production base and responds to trade restrictions in major markets.
In March, the company signed a long-term contract worth about 1 trillion won ($700 million) to supply synthetic graphite anode materials to a global automaker. It is also investing about 357 billion won to build a synthetic graphite plant in Vietnam.