POSCO Future M (003670.KS) will build a lithium iron phosphate (LFP) cathode plant dedicated to energy storage systems (ESS).
POSCO Future M held a board meeting on January 15 and approved a plan to construct an LFP cathode plant at the Yeongil Bay 4 General Industrial Complex in Pohang. Construction is scheduled to begin next year with mass production starting in the second half of 2027. All LFP cathodes produced at the facility will be supplied exclusively for ESS applications.
POSCO Future M is pursuing the LFP cathode plant construction through additional investment in CNP New Material Technology, a joint venture established with China's CNGR in 2023. POSCO Future M will contribute approximately 20 billion won for a 20% stake. Starting with this investment, the company plans to expand production capacity to a maximum of 50,000 tons. Previously, POSCO Future M signed a memorandum of understanding with CNGR and its Korean subsidiary PINO in August to pursue ESS LFP cathode business and has been conducting business reviews.
LFP batteries have lower power output compared to ternary batteries such as nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA), but their lower cost and longer lifespan have led to increasing adoption in various applications including ESS and entry-level electric vehicles.
As demand for LFP batteries for ESS has surged in the North American market recently, major battery manufacturers are accelerating efforts to convert existing ternary battery production lines to LFP battery lines. POSCO Future M, which currently focuses on producing ternary cathodes including NCM and NCA, aims to diversify its cathode product portfolio through this LFP plant investment approval to strengthen its competitiveness in securing orders in the global market. To enter the LFP market early in response to market and customer demands, the company plans to convert part of its existing ternary NCM cathode production line at the Pohang cathode plant to an LFP cathode line and begin supply by the end of 2026.
Meanwhile, POSCO Future M is actively pursuing product diversification in line with rapid growth and segmentation in the EV and ESS markets. In the first half of this year, global automakers including General Motors and Ford announced plans to adopt lithium manganese-rich (LMR) batteries, and POSCO Future M completed pilot development of LMR cathodes in collaboration with POSCO Holdings Future Technology Research Institute, which oversees research and development for the POSCO Group. In the second half, the company completed pilot development of ultra-high-nickel cathodes for premium EVs and high-voltage mid-nickel cathodes.
