Korea's top battery material makers accelerate second-half strategies in LFP, NCM race

L&F to begin LFP cathode supply in Q3

'5,000 tons this year, 50,000 tons next year'

Posco Future M seals first long-term deal for 190,000 tons

Ecopro BM bets on Indonesia to cut NCM costs

An exterior view of L&F Plus. [Provided by L&F]

South Korea's three major battery material makers — Posco Future M, Ecopro BM and L&F — are moving quickly to recalibrate their second-half strategies as they seek to expand their market foothold. Ecopro BM is doubling down on NCM cathode materials and next-generation solid-state battery components, while Posco Future M and L&F are both pushing hard into the lithium iron phosphate, or LFP, market.

Industry sources said Friday that L&F and Posco Future M are ramping up LFP cathode production and supply expansion targeting the North American ESS market, while Ecopro BM is accelerating efforts to strengthen its NCM competitiveness and develop next-generation battery materials.

The driving force behind the shift is a surge in power demand fueled by the rapid build-out of AI data centers. As demand for ESS to ensure stable electricity supply grows, LFP batteries — which offer lower output but lower cost and longer lifespan — are gaining traction as the preferred choice for stationary storage applications.

The LFP market has long been dominated by Chinese companies. According to SNE Research, LFP accounted for 72 percent of the global cathode material market last year, and all 10 of the top LFP cathode suppliers by shipment volume are Chinese firms. South Korean material makers, which have built their competitiveness around NCM and NCA chemistries, are now rushing to enter the LFP space.

Samsung SDI's ESS product SBB 2.0, which uses LFP batteries. [Provided by Samsung SDI]

L&F is the first of the three to enter mass production. The company began supplying LFP cathode materials for the North American ESS market in the third quarter, having already shipped prototype units from its LFP mass-production line at its Daegu factory through subsidiary L&F Plus. It plans to secure annual production capacity of 50,000 tons by 2027 through C&P New Material Technology, a joint venture with Fino and CNGR.

L&F is also broadening its customer base. Samsung SDI plans to use L&F's LFP cathode materials to produce batteries at StarPlus Energy, its joint venture with Stellantis in Indiana. L&F has also signed a mid-to-long-term supply agreement with US battery technology firm Coreshell Technologies, extending its reach beyond ESS into mobility and defense applications.

L&F has raised its LFP shipment forecast for this year from 3,000 tons to more than 5,000 tons. "Current customer demand is significantly exceeding our initial projections, so we expect LFP shipments this year to expand from the roughly 3,000 tons we planned at the start of the year to more than 5,000 tons," the company said. "By 2027, we expect to achieve shipments of more than 50,000 tons and an operating rate of more than 90 percent."

An exterior view of Posco Future M's cathode material factory in Pohang, located in the Yeongil Bay 4th Industrial Complex. [Provided by Posco Future M]

Posco Future M has agreed to a large-scale, long-term contract to supply more than 190,000 tons of LFP cathode materials to a major battery maker over six years from 2027 to 2032. The deal is a preemptive move to meet surging North American ESS demand. A formal contract is to be signed in the third quarter after specific terms are finalized.

In preparation, the company has completed the conversion of part of its high-nickel cathode production line at its Pohang factory to LFP use and is currently conducting customer prototype certification, with mass-production supply set to begin by year-end. Going forward, Posco Future M plans to improve cost competitiveness through a new production method using iron oxide — a steelmaking byproduct secured through the Posco Group — and lithium from salt flats in Argentina.

A view of the BNSI smelter construction site in Sulawesi, Indonesia. [Provided by Ecopro BM]

Ecopro BM is focused on improving the cost competitiveness of NCM batteries. The company aims to overcome NCM's main drawback — higher production costs compared with LFP — by driving down manufacturing expenses. To that end, it plans to complete a rights offering in the second half of this year and proceed with investment in a nickel smelter in Indonesia.

The company is also pushing ahead with next-generation battery material development, including solid electrolytes for all-solid-state batteries and cobalt-free lithium manganese-rich, or LMR, cathode materials. A distinctive aspect of Ecopro BM's approach is that it is developing solid electrolytes alongside compatible cathode materials for solid-state batteries at the same time. Its LMR cathode material is understood to have entered the final verification stage ahead of mass production.

"We plan to maximize cost competitiveness through investment in the Indonesian nickel smelter," Ecopro BM said. "We will continue to innovate production efficiency to lower manufacturing costs, and pursue both qualitative and quantitative growth by developing next-generation materials — including solid-state battery components — alongside our existing NCM cathode lineup."

eyre@heraldcorp.com