POSCO Future M has secured a long-term agreement to supply a leading Korean battery manufacturer with lithium iron phosphate (LFP) cathode materials, marking its official entry into the expanding LFP segment. Under the terms finalized on Thursday, the company will deliver more than 190,000 metric tons of LFP cathode materials between 2027 and 2032. While the customer’s identity remains confidential, both parties aim to complete contract negotiations and sign the formal agreement in the third quarter.
This deal aligns with a surge in demand for energy storage systems (ESS) in North America, driven largely by the rapid growth of power-intensive artificial intelligence data centers. To enhance cost competitiveness, POSCO Future M plans to leverage raw materials from the broader POSCO Group, including iron oxide recovered from steelmaking processes and lithium sourced from Argentina.
In parallel with this agreement, POSCO Future M is in advanced discussions with other major battery producers to secure additional supply contracts. The company intends to expand its production capacity in response to incoming orders. Earlier this year, it converted part of its cathode material production line at the Pohang facility to focus on LFP output. Customer certification for LFP prototypes is currently underway, with mass production slated to begin by the end of the year.
LFP batteries generally offer lower energy density compared to nickel-based chemistries but are favored for their lower cost and longer cycle life. These characteristics have made them increasingly popular for use in ESS applications and more affordable electric vehicles as market demand shifts toward economical battery solutions.
Beyond its LFP activities, POSCO Future M is pursuing partnerships with global battery makers and automakers to broaden its international footprint and navigate trade restrictions in key markets. In March, the company signed a long-term contract worth approximately 1 trillion won to supply synthetic graphite anode materials to a major automaker. It is also investing around 357 billion won to establish a synthetic graphite plant in Vietnam.
Source: The Korea Times
