Posco Future M has signed an agreement with LG Energy Solution to supply 720,000 metric tons of battery materials over seven years starting in 2027, expanding their partnership to include lithium iron phosphate cathodes and synthetic graphite anodes for the first time.
The South Korean battery materials maker said it signed a memorandum of understanding with battery maker LG Energy Solution to strengthen cooperation on battery materials and jointly respond to shifting market conditions and global trade regulations.
The agreement covers a broader range of battery materials, including LFP cathodes, synthetic graphite anodes and ultra-high-nickel cathodes, as well as cooperation on next-generation technologies such as sodium-ion batteries and silicon anodes.
The companies plan to finalize their product supply road map and sign a binding contract by the end of this year.
The partnership marks an expansion of the companies’ existing cooperation, which has centered mainly on nickel-cobalt-manganese cathode materials. They aim to improve the cost competitiveness of these materials while expanding into LFP batteries, which have gained traction in energy storage systems and affordable electric vehicles.
The agreement adds LG Energy Solution to Posco Future M's growing list of LFP cathode supply partners, alongside Samsung SDI and SK On. The company recently secured a 1.1 trillion won ($824.41 million) supply contract with SK On for 2027-2029 and a 6 trillion won deal with Samsung SDI for 2027-2032.
Demand for LFP batteries has surged amid rising demand for ESS, particularly in North America, where the rapid expansion of artificial intelligence data centers is driving investment.
Washington is also tightening restrictions on Chinese-linked battery supply chains. Tougher US tax credit rules limit incentives for energy storage projects and battery manufacturers that rely heavily on materials sourced from what the US government defines as "prohibited foreign entities," including certain Chinese suppliers.
The restrictions are creating new opportunities for Korean battery makers and material suppliers to expand their presence in North America.
To meet the growing demand, Posco Future M plans to accelerate the conversion of high-nickel cathode production lines at its Pohang plant into LFP manufacturing facilities. The company aims to begin supplying LFP cathode materials to LG Energy Solution in early 2027.
It also plans to develop next-generation LFP cathode materials using lithium sourced from Posco Group's salt lake operations in Argentina, with the aim of improving cost competitiveness and product quality.
In addition, Posco Future M will manufacture synthetic graphite anode materials in South Korea and Vietnam for supply to LG Energy Solution.
sahn@heraldcorp.com
