POSCO Future M to Supply ₩1.0742 Trillion in LFP Cathode Materials to SK On, Completing Alliance with All Three South Korean Battery Makers
POSCO Future M signed a ₩1.0742 trillion ($790.7M) deal with SK On to supply LFP cathode materials for 2027-2029, extendable to 2031. This completes alliances with all three major South Korean battery makers. Materials will be used in U.S. ESS batteries, supporting SK On's non-Chinese supply chain for U.S. tax credits. POSCO Future M plans to expand LFP production and secure lithium from Argentina.
How this was made
The 30-second read
Why it matters
The deal provides a strategic foothold in the U.S. market and aligns with policy incentives, likely improving POSCO's top‑line guidance.
Market read
A major supply contract that could lift POSCO Future M's revenue outlook and influence the broader battery materials sector.
What to watch
Potential cost overruns in new production lines and currency risk from KRW‑USD fluctuations.
Background
POSCO Future M is diversifying from high‑nickel cathodes to LFP to capture growing ESS and entry‑level EV demand.
Market effects
Strengthens the LFP battery material supply chain, benefiting ESS and EV markets.
Boosts South Korean battery ecosystem and U.S. ESS growth prospects.
Supports non‑Chinese supply chain shift under U.S. IRA policies.
Counterpoint
If demand for LFP batteries stalls, the contract may not translate into expected revenue.
Key entities
- companyPOSCO Future M
POSCO subsidiary producing battery cathode and anode materials.
- companySK On
Battery maker and subsidiary of SK Innovation.
