POSCO Future M rises as beneficiary of US tariffs on Chinese graphite

The U.S. government’s recent move to impose heavier tariffs on Chinese graphite has driven investors toward POSCO Future M, even as the battery material maker reported weaker profits due to sluggish global demand for electric vehicles (EVs).

With its natural graphite sourced from Africa and synthetic graphite produced using byproducts from POSCO’s steelworks, POSCO Future M’s anode materials are viewed as the U.S.' only alternative to Chinese products.

Buoyed by this optimism, the company’s shares jumped 19.59 percent to 156,900 won ($113) on Friday, when it estimated its second-quarter operating profit at 773 million won, a 71.7 percent decline from a year earlier.

“POSCO stands to gain the most as it is able to supply graphite to North America,” Yuanta Securities analyst Lee An-na said, referencing the latest U.S. tariffs on anode-grade graphite imported from China.

The U.S. Department of Commerce said Thursday it will set preliminary anti-dumping duties of 93.5 percent on the key EV battery component, noting that Chinese anode materials have been sold in the U.S. below fair value. Final anti-dumping and anti-subsidy tariffs are expected by Dec. 5.

Two Chinese anode materials suppliers already faced countervailing, or anti-subsidy, duties as high as 721 percent in May. The new measure is expected to have an even greater impact, as all Chinese anode materials suppliers will be affected.

“We have lagged behind Chinese competitors when it comes to price competitiveness in both natural and synthetic graphite,” a POSCO Future M official said Friday during a conference call on its second-quarter earnings. “But with the new U.S. tariffs in place, our products will be able to compete on price.”

According to SNE Research, all of the world’s top 10 anode materials suppliers are Chinese companies. While these firms together control about 80 percent of the market, POSCO Future M remains in 11th place with close to a 1 percent share.