SK On, POSCO Future M Sign KRW 1.1 Trillion LFP Cathode Supply Deal to Bolster U.S. ESS Push
TECHWORLD ·
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SK On and POSCO Future M have signed a KRW 1.1 trillion supply deal for LFP cathode materials.
The supply period runs for 3 years, from 2027 to 2029, and with mutual agreement, the term can be extended by an additional 2 years after 2029.
LFP cathode materials produced by POSCO Future M are scheduled to be supplied to SK On's plant in Georgia in the U.S. and used to manufacture LFP battery cells for ESS.
SK On and POSCO Future M have signed a KRW 1.1 trillion supply deal for LFP cathode materials. The agreement supports SK On's effort to strengthen its push into the U.S. ESS market.
The supply period runs for 3 years, from 2027 to 2029. With mutual agreement, the term can be extended by an additional 2 years after 2029.
With this deal, POSCO Future M will seek to expand orders for LFP cathode materials. It will also broaden its product portfolio, which has centered on ternary batteries.
LFP cathode materials produced by POSCO Future M are scheduled to be supplied to SK On's plant in Georgia. The volume will be used to manufacture LFP battery cells for ESS.
Through this contract, SK On plans to secure a supply chain for non-Chinese LFP cathode materials for its U.S. ESS business. It also aims to diversify sourcing routes for key materials in response to rising ESS demand in the U.S. and strengthen local production competitiveness.
POSCO Future M is expanding its production base for LFP cathode materials. In response to growing demand, it will convert part of the high-nickel cathode material line at its Pohang plant into an LFP cathode material line. LFP cathode materials are expected to enter mass production from late this year, and the company plans to expand the converted line if it wins additional orders.
POSCO Future M is also pursuing a plan to expand production capacity. It will link its raw material supply chain with POSCO Group and use lithium secured from Argentine salt flats in the future. It also plans to apply new production processes, with the goal of improving cost competitiveness and quality.
POSCO Future M said the deal is meaningful because it expands its customer portfolio. The company has previously supplied anode materials to SK On, and this contract adds cathode material supply. As a result, it has established a supply system for both cathode and anode materials for all three major domestic battery makers.
The backdrop to the partnership is the growing demand for ESS LFP batteries. Compared with ternary batteries based on NCM and NCA, LFP batteries offer lower output but have the advantages of stronger price competitiveness and longer lifespan.
Demand for ESS is rising amid the expansion of AIDC and the need for stable power supply. As ESS demand increases, the adoption of LFP batteries is also expanding.
In response, battery companies are intensifying efforts to address the North American ESS market. Their response includes pushing ahead with local production and accelerating the securing of non-Chinese materials.
Against this backdrop, SK On is expanding related businesses, while POSCO Future M is pushing ahead with its LFP cathode material business and strengthening its anode material business. In August, SK On signed an LFP battery cell supply deal with U.S. ESS company NEOVolta Power, and in September last year it signed an ESS supply deal with U.S. renewable energy company Flatiron Energy Development. In March, POSCO Future M signed a KRW 1 trillion long-term supply deal for artificial graphite anode materials with a global automaker, and it plans to invest about KRW 357 billion in Vietnam to build a new artificial graphite anode materials plant.
Based on this agreement, the two companies plan to expand the scope of their mid- to long-term cooperation. SK On intends to strengthen its supply chain for key materials for the U.S. ESS market. POSCO Future M aims to expand LFP cathode material production and pursue additional orders, thereby broadening the growth base of its battery materials business.
Kim Seong-tan, head of raw material purchasing at SK On, said the company will respond to the growing ESS demand in the U.S. while focusing on building a China-free supply chain and strengthening the competitiveness of key materials. He added that the company will continue to pursue stable material sourcing and expansion of the ESS market through strategic cooperation.
Source: TECHWORLD · Kim Seung-gi
Original: https://www.epnc.co.kr/news/articleView.html?idxno=407313
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Source: TECHWORLD
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