SK On Signs KRW 160 Billion LFP Cathode Material Deal With L&F, Strengthens ESS Supply Chain
TECHWORLD ·
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SK On signed a lithium iron phosphate (LFP) cathode material supply deal with L&F worth about KRW 160 billion on the 17th.
With this deal, SK On will secure domestically produced cathode material needed to make LFP batteries for ESS over the 3 years from 2026 to 2028.
The cathode material will be used in battery production for ESS in Korea and the U.S., and the two companies can discuss extending the contract for up to 3 years after 2028.
SK On signed a lithium iron phosphate (LFP) cathode material supply deal with L&F on the 17th. The contract is worth about KRW 160 billion. With this agreement, SK On will secure the cathode material needed to produce LFP batteries for ESS over the 3 years from 2026 to 2028.
The supplied item is domestically produced LFP cathode material. The material will be used in batteries for ESS in Korea and the U.S. The planned production lines are the ESS LFP battery cell lines at the Seosan plant in South Chungcheong Province and the plant in Georgia.
The two companies can discuss extending the contract for up to 3 years after 2028. Any extension talks will take into account market conditions, supply performance and customer demand.
Based on this deal, SK On plans to pursue a supply chain for non-China LFP cathode materials. It also plans to enhance its response capability in the domestic and U.S. ESS markets.
In line with orders for LFP batteries for ESS, SK On is converting production lines at its Seosan plant in Korea and its plant in Georgia, U.S. The Seosan plant has a total production capacity of 7GWh. Of that, 3GWh at the Seosan plant will be converted into an ESS LFP battery line, and deliveries from the converted Seosan capacity are scheduled to begin in the first half of 2027.
In the U.S., some lines at the Georgia plant will be converted exclusively for ESS LFP batteries. Last August, SK On and Neovolt Power signed a supply deal for LFP battery cells in the U.S.
In Korea, the second ESS centralized contract market bidding was conducted this February. Total bid volume was 565MW, and secured volume was 284MW, for a securing rate of about 50.3%.
On the materials side, L&F will supply the cathode material. L&F completed a dedicated LFP cathode material plant in May at the Daegu Dalseong-gun national industrial complex. After stabilizing production and verifying quality, it shipped trial products from the LFP cathode material mass-production line at the end of July.
SK On will receive high-density third-generation LFP cathode material as the supplied product, which has higher energy density than conventional LFP cathode material. SK On plans to apply the cathode material to ESS batteries, aiming to strengthen the competitiveness of LFP products and secure stable material supply.
Kim Seong-tan, head of raw material procurement at SK On, said supply chain decoupling from China is now in full swing in the global ESS battery market, and explained that the company has preemptively secured domestically produced LFP cathode material through a mid- to long-term supply contract. He added that he hopes this deal will strengthen SK On's competitiveness in LFP battery materials.
Source: TECHWORLD · Kim Seung-gi
Original: https://www.epnc.co.kr/news/articleView.html?idxno=407108
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Source: TECHWORLD
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