Posco Future M breaks into LFP market with 190,000-ton supply deal

Posco Future M announced Thursday that it will supply cathode materials for lithium iron phosphate (LFP) batteries for the first time, after reaching a large-scale, long-term supply agreement with a major South Korean battery maker. The two companies plan to sign a formal contract in the third quarter.

The agreement was reached to get ahead of rapidly growing demand for energy storage systems (ESS) in North America. Under the deal, Posco Future M will supply more than 190,000 tons of LFP cathode materials from next year through 2032 — a six-year period. The parties will finalize specific terms before signing the formal contract later this quarter.

Going forward, Posco Future M plans to produce and supply LFP cathode materials with greater cost competitiveness by applying new manufacturing processes that draw on Posco Group-wide cooperation — using iron oxide and other steelmaking byproducts, as well as lithium sourced from salt lakes in Argentina.

The company said it is also in the final stages of LFP cathode supply negotiations with other large customers and intends to expand its LFP cathode production capacity in line with additional orders.

LFP batteries offer lower output than ternary chemistries such as nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA), but their lower cost and longer lifespan are key advantages. Demand for LFP batteries in ESS applications has been rising as power consumption surges, driven in part by the rapid expansion of AI data centers. The trend is also spreading in the electric vehicle market, particularly in entry-level models.

Chinese companies currently supply about 95 percent of global LFP cathode materials, but South Korean battery materials makers that had focused on ternary chemistries are now moving into the LFP market as well.

To ensure timely delivery to customers, Posco Future M recently completed the conversion of part of its high-nickel cathode production line at its Pohang factory to LFP cathode production. The company is currently running prototype certification with customers and plans to begin mass production and supply by the end of this year.

Posco Future M is also in ongoing supply discussions with global battery makers and automakers for both cathode and anode materials, backed by supply chain resilience and technology capable of navigating trade regulations across various countries. In March, the company signed a large-scale, long-term supply contract for artificial graphite anode materials worth 1 trillion won ($702 million) with a global automaker, and is pushing to expand production capacity by investing about 357 billion won to build a new artificial graphite anode factory in Vietnam.

Separately, C&P New Materials Technology — a joint venture between Posco Future M and Fino-CNGR — broke ground in May on an LFP cathode factory at the Yeongil Bay 4th General Industrial Complex in Pohang, targeting mass production by 2027. The facility is designed to scale up production capacity to as much as 50,000 tons in phases.

Meanwhile, Posco Future M posted sales of 679.5 billion won and operating profit of 26.7 billion won in the second quarter of this year, up 2.8 percent and 3,512 percent, respectively, from the same period last year.