NCA and LFP combined at 21 trillion won

LFP addition of 6 trillion won boosts supply volume 45%

Long-term supply through 2032

Cooperation to expand into LMO and artificial graphite

Yoon Tae-il (left), head of Posco Future M's energy materials marketing division, and Lee Gwang-su, head of Samsung SDI's procurement center, pose for a photo after signing a long-term battery materials supply contract — including LFP cathode materials — at Samsung SDI's Dongtan campus on Tuesday. [Posco Future M]
Yoon Tae-il (left), head of Posco Future M's energy materials marketing division, and Lee Gwang-su, head of Samsung SDI's procurement center, pose for a photo after signing a long-term battery materials supply contract — including LFP cathode materials — at Samsung SDI's Dongtan campus on Tuesday. [Posco Future M]

Posco Future M will supply Samsung SDI with lithium iron phosphate (LFP) cathode materials worth 6 trillion won ($4.42 billion) under a long-term contract, the company announced Tuesday. The deal expands the two companies' partnership — previously centered on nickel-cobalt-aluminum (NCA) cathode materials — to include LFP, pushing the total value of battery materials contracts between them to more than 21 trillion won through 2032.

Posco Future M disclosed Tuesday that it had signed a long-term battery materials supply agreement with Samsung SDI covering LFP cathode materials. The new contract amends a long-term NCA cathode supply deal the two companies signed in 2023, expanding the range of products covered.

The total contract value stands at 21.25 trillion won. NCA cathode materials account for 15.2 trillion won, or about 71.5 percent, while the newly added LFP cathode materials make up 6.05 trillion won, or about 28.5 percent.

The original contract covered only NCA cathode materials, but a portion of the volume has now been converted to LFP. Posco Future M had agreed with Samsung SDI in August to supply 190,000 metric tons of LFP cathode materials from 2027 through 2032; under the formal contract signed Tuesday, that figure more than doubled to at least 380,000 metric tons. Total supply volume across NCA and LFP combined rose about 45 percent from the original contract as a result.

The total contract value, however, fell to 21 trillion won from roughly 40 trillion won disclosed when the original deal was announced in 2023. The decline does not reflect a reduction in supply volume. Rather, it stems from a drop in lithium prices — which are linked to cathode material pricing — since the original contract was signed, which lowered the per-unit selling price.

A rendering of the LFP cathode material factory being built by CNP New Material Technology, a joint venture of Posco Future M, at the Yeongil Bay 4th Industrial Complex in Pohang. The facility is targeting mass production by 2027, with annual capacity to be scaled up to a maximum of 50,000 metric tons in stages. [Posco Future M]
A rendering of the LFP cathode material factory being built by CNP New Material Technology, a joint venture of Posco Future M, at the Yeongil Bay 4th Industrial Complex in Pohang. The facility is targeting mass production by 2027, with annual capacity to be scaled up to a maximum of 50,000 metric tons in stages. [Posco Future M]

The two companies plan to further broaden the scope of their trading relationship. Beyond NCA and LFP, they are pursuing an expansion of cooperation to include lithium manganese oxide (LMO) cathode materials and artificial graphite anode materials.

For Posco Future M, the arrangement would create a structure in which it supplies a single customer with high-nickel cathode materials, standard cathode materials and anode materials alike. Samsung SDI, for its part, stands to reduce its dependence on materials sourced from any single country.

Through the contract, the two companies aim to expand a supply chain for cathode and anode materials that falls outside the scope of US-designated Prohibited Foreign Entities (PFE). As battery supply chain regulations tighten — particularly in the United States — securing alternatives to Chinese-origin raw materials and components has become a central challenge for the battery industry.

Posco Future M intends to use the long-term supply volume it has secured to raise production line utilization rates and to firm up plans for future capacity scale-up and raw material procurement. Samsung SDI, meanwhile, has secured a materials supplier as it expands the application of LFP batteries beyond electric vehicles into areas such as energy storage systems (ESS).

Posco Future M has been landing a string of LFP cathode material orders in recent months. Last month, it signed a contract with SK On to supply LFP cathode materials worth about 1.1 trillion won from 2027 through 2029, with an option to extend the contract by up to two years by mutual agreement. With the Samsung SDI deal now added, Posco Future M has built a customer base spanning all three of South Korea's major battery manufacturers for both cathode and anode materials.


kwater@heraldcorp.com