Battery materials firms ramp up LFP capacity amid rising demand
Summary
POSCO Future M, L&F and EcoPro BM are expanding LFP cathode-material capacity in South Korea as demand grows for energy storage systems and non-Chinese supply chains in North America. POSCO Future M plans to raise annual capacity at its Pohang plant from about 20,000 tons to as much as 105,000 tons by the end of next year, while L&F plans to reach 120,000 tons by the second half of 2028. EcoPro BM is discussing a supply deal and considering a dedicated production line. The companies see ESS demand as a potential growth driver amid sluggish electric vehicle demand and pressure on sector profitability.
Key Facts
- Domestic battery makers and materials suppliers have LFP cathode supply commitments estimated to exceed 210,000 metric tons.
- POSCO Future M plans to use up to 50,000 tons of capacity from CNP New Material Technology, its joint venture with CNGR and Fino.
- POSCO Future M signed a 1.07 trillion won supply deal with SK On in September and a contract worth about 6 trillion won with Samsung SDI last month.
- L&F has mid- to long-term LFP supply agreements totaling 250,000 tons, equivalent to approximately 100 gigawatt-hours of ESS capacity.
- EcoPro BM is discussing an LFP supply deal covering approximately 4,000 tons annually and considering a production line with annual capacity of up to 50,000 tons.
A production line at POSCO Future M's Sejong plant / Courtesy of POSCO Future M
Battery materials makers are accelerating their expansion into lithium iron phosphate (LFP) materials, as growing demand for energy storage systems (ESS) and non-Chinese supply chains in North America fuels competition to secure production capacity.
LFP cathode supply commitments between domestic battery cell makers and materials suppliers are estimated to exceed 210,000 metric tons, according to industry estimates, prompting manufacturers — POSCO Future M, L&F and EcoPro BM — to step up investments.
POSCO Future M is expanding its LFP capacity by converting part of its existing high-nickel cathode production lines at its Pohang plant.
The company plans to increase annual capacity from about 20,000 tons to as much as 105,000 tons by the end of next year. It also plans to utilize up to 50,000 tons of capacity from CNP New Material Technology, a joint venture with CNGR and Fino.
Following a 1.07 trillion won ($784.5 million) LFP cathode material supply deal with SK On in September, POSCO Future M signed another long-term supply contract worth about 6 trillion won with Samsung SDI last month.
L&F is also moving to expand capacity after securing supply agreements with all three major Korean battery makers — Samsung SDI, SK On and LG Energy Solution.
The company signed about a 1.6 trillion won ($1.17 billion) contract with Samsung SDI in March, followed by a 161.7 billion won deal with SK On in September and a supply agreement worth about 1 trillion won with LG Energy Solution this month.
L&F has secured mid to long-term LFP supply agreements totaling 250,000 tons, equivalent to approximately 100 gigawatt-hours of ESS capacity.
To meet demand, the company plans to add 60,000 tons of annual production capacity by the second half of 2028, bringing its total to 120,000 tons. Unlike POSCO Future M, which is converting existing facilities, L&F plans to build dedicated LFP production lines without repurposing its nickel-cobalt-manganese facilities.
The corporate logo of EcoPro is seen in this file photo. Courtesy of EcoPro
EcoPro BM, which traditionally focused on high-nickel ternary cathode materials, is also entering the market as demand for LFP batteries grows in North America's ESS sector.
The company is discussing an LFP supply deal covering approximately 4,000 tons annually and is considering building a dedicated production line with annual capacity of up to 50,000 tons over the longer term.
The shift reflects growing opportunities in the ESS market, with rising demand driven by investment in artificial intelligence data centers and power grids in North America. LFP batteries, which generally offer lower costs and longer cycle lives than nickel-based alternatives, are increasingly favored for stationary energy storage.
Domestic cathode makers have historically lagged behind Chinese competitors in LFP technology and production, leaving them at a disadvantage in cost competitiveness and market share. However, efforts to diversify supply chains are creating new opportunities for non-Chinese producers.
The companies are betting that rising ESS demand and longer-term supply agreements will help establish LFP materials as a new growth driver amid sluggish electric vehicle demand and pressure on profitability across the battery materials sector.
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