A supply agreement between POSCO Future M and SK On will deliver LFP cathode material valued at approximately KRW 1.1 trillion ($800 million) over a three-year period beginning in 2027 and concluding in 2029. The two parties have included a provision allowing for a two-year extension should both sides agree to continue the arrangement.
This marks POSCO Future M's inaugural cathode supply contract with SK On, though the materials company has already been providing anode material to the battery manufacturer. With this new agreement in place, POSCO Future M now furnishes both cathode and anode materials to all three of South Korea's leading battery producers. An additional long-term supply arrangement announced in August commits POSCO Future M to delivering 190,000 metric tons of LFP cathode material to another Korean battery manufacturer.
Expanding LFP Capacity at Pohang Facility
LFP batteries present a different value proposition compared to NCM and NCA chemistries, sacrificing energy density in exchange for lower costs and extended cycle life. POSCO Future M is responding to rising interest in these cells from makers of stationary energy storage and budget-friendly electric vehicles by broadening its material offerings beyond its traditional NCM and NCA focus.
The company has begun converting sections of its high-nickel cathode production equipment at its Pohang facility to manufacture LFP material, with full commercial production anticipated to commence by the final quarter of 2026. Additional conversion of production capacity will proceed based on incoming orders. To strengthen its competitive position and material quality, POSCO Future M intends to source lithium from salt deposits in Argentina.
Source: Battery-News
