Posco Future M targets 45-day-to-1-day production leap in anode race against China

Non-China graphite hubs planned for Saemangeum, Vietnam

Supply deals worth 1.7 trillion won secured for natural and artificial graphite

Continuous graphitization furnace aims to cut lead time from 45 days to 1

Cost gap with China in focus as next-gen anode development advances

A production line at Posco Future M's artificial graphite anode factory in Pohang [Posco Future M]

Posco Future M is pursuing a two-pronged push in the anode material market — building a non-China supply chain while overhauling its production process. The company plans to establish graphite production hubs in Saemangeum and Vietnam, and is developing technology to slash the lead time for artificial graphite production from roughly 45 days to just one day. The goal is to close the cost gap with Chinese rivals and capture a larger share of the non-China anode market.

China controls 97% of anode market, fueling demand for non-China supply

Posco Future M plans to bring its spherical graphite and artificial graphite production facilities online in stages, according to battery industry sources. The company is building a spherical graphite facility at Saemangeum targeting the start of mass production in the first half of 2027, and an artificial graphite factory in Vietnam aimed at beginning output in the first half of 2028.

Each site will serve a distinct role. Pohang will produce high-performance artificial graphite based on secondary particles for the premium electric vehicle market, while Vietnam will focus on mid-range products. The structure positions Pohang at the high end and Vietnam in the middle tier.

Posco Future M has already locked in customers. The company signed a natural graphite anode supply contract worth about 700 billion won ($506 million) with a global automaker in October last year, then followed that with a long-term artificial graphite anode supply agreement worth about 1 trillion won with another global automaker in March this year. The two contracts combined are valued at approximately 1.7 trillion won.

Anode materials are among the battery components most heavily concentrated in Chinese supply chains. China accounted for 97 percent of global anode active material production capacity in 2024, according to the International Energy Agency. SNE Research data shows Chinese companies held a 95.7 percent share of global EV battery anode shipments in the second quarter of this year.

Demand for non-Chinese anode materials is growing, however, particularly in North America and Europe. In the United States, a temporary exemption from Foreign Entity of Concern restrictions on graphite used in anode materials — tied to the Inflation Reduction Act's EV tax credit — is set to expire in 2027. The EU will also require a "battery passport" from Feb. 18 next year, mandating that EV batteries and others carry records of raw material composition, carbon footprint, performance and recycling history.

Policy-driven demand for non-Chinese anode materials is expanding, but the market's growth potential remains limited unless the price gap with Chinese products can be narrowed. That is why Posco Future M is pursuing process innovation alongside its non-China supply chain push.

"Graphite-based materials are being hit simultaneously by export controls and trade measures, meaning certification, raw material procurement and next-generation technologies such as silicon anodes will determine each company's competitive standing," SNE Research said. The firm added that the EU battery passport requirement taking effect in February is adding supply chain traceability demands at the materials level, making it increasingly important to accelerate the establishment of local production bases.

An exterior view of Posco Future M's silicon anode material demonstration plant in Pohang. [Posco Future M]

Batch at 3,000°C to continuous at 2,700°C — targeting up to 80% power savings

Chinese companies have built their cost advantage by clustering graphite mines alongside refining and spheroidization plants and running large-scale production facilities. Concentrating the value chain — from graphite mining through refining, spheroidization, carbon coating and battery cells — has kept logistics and fixed costs low, while co-development with domestic cell makers has accelerated product development.

Posco Future M is pursuing process innovation to close the price gap with Chinese producers alongside its non-China supply chain push. The key technology is continuous graphitization of artificial graphite. Conventional artificial graphite is produced in a batch process that heats raw materials to around 3,000 degrees Celsius, cycling repeatedly through heating, holding and cooling stages. The repeated heating and cooling makes for long production times and high power consumption.

Posco Future M is developing a process that continuously feeds raw materials into a furnace at around 2,700 degrees Celsius and draws out finished product in an uninterrupted stream. The target is to cut the existing production lead time of roughly 45 days to about one day while reducing power consumption by up to 80 percent. Eliminating the repeated heating and cooling cycles is expected to lower electricity costs and raise equipment utilization rates, bringing down depreciation and fixed costs as well.

Stabilizing mass production remains the critical challenge, however. "The key questions are whether continuous operation at above 2,700 degrees Celsius is sustainable over extended periods, whether clumping or blockages occur during raw material transfer, and whether the same degree of graphitization, initial efficiency and cycle life as batch-process products can be achieved," said Lee An-na, an analyst at Yuanta Securities Korea. She added that the 80 percent power reduction target is measured against the company's own existing process, meaning per-ton costs and quality relative to China's leading producers still need to be verified.

Posco Future M and Molten signed an MOU at COEX in Seoul to jointly develop natural graphite anode raw materials using methane gas. From left: Hong Young-jun, head of Posco Future M's technology research institute, and Caleb Boyd, chief technology officer of Molten. [Posco Future M]

Posco Future M is also pursuing raw material innovation on the natural graphite side. The company is developing methane pyrolysis technology, which breaks down methane at high temperatures to produce carbon and hydrogen. It has signed an MOU with Molten, a US company with expertise in the technology, to explore ways to expand its non-China graphite supply chain.

Meanwhile, Posco Future M is advancing next-generation anode development in parallel. The company aims to develop hard carbon for sodium-ion batteries by the third quarter of 2027 and begin mass production in 2028 using equipment compatible with its existing production lines. It is targeting completion of technology development for solid-state battery anode materials by 2029 and for lithium metal anodes by 2030.

eyre@heraldcorp.com