Posco Future M to supply 720,000 tonnes of battery materials to LGES

Posco Future M will supply 720,000 tonnes of cathode and anode materials to LG Energy Solution over seven years under a memorandum of understanding the two South Korean companies signed to expand their battery materials partnership. Posco Future M disclosed the tonnage; it has not broken the volume down by material type. The partners intend to finalise a formal contract later this year.

The agreement spans LFP (lithium iron phosphate, a lower-cost cathode chemistry), synthetic graphite, ultra-high-nickel cathode materials, and future products such as sodium-ion battery materials and silicon anodes. Deliveries are slated to begin in early 2027.

Where will the LFP volume come from?

The ramp-up route is conversion rather than new build. Posco Future M plans to convert existing high-nickel cathode lines at its Pohang plant to LFP and start supplying LGES from early 2027. The company says some lines have already been retrofitted — a concrete signal that this is a confirmed capacity plan, not a paper intention.

Posco Future M also intends to adopt a new process using lithium sourced from the Posco Group's Argentine salt lake operations. The company expects this to cut costs further and lock supply inside its own value chain, a meaningful hedge for a cathode maker exposed to lithium price swings.

What does the deal change for anode supply?

On the anode side, synthetic graphite will be produced in Korea and Vietnam for LGES. Posco Future M points to fast-charging capability and lifespan as its differentiators against graphite competitors. The MoU also covers joint development of sodium-ion materials, ultra-high-nickel cathodes and silicon anodes — chemistries aimed at future cell generations rather than current programmes.

The partners plan to deepen cooperation on existing NCM (nickel-cobalt-manganese) deliveries as well. In the medium term they want to raise the share of metals recovered from used batteries, which Posco Future M says improves cost efficiency while strengthening material cycles.

Why a targeted deal, not a growth spree?

Context matters here. In 2024, both LG Energy Solution and Posco announced delays and reprioritisation of battery investments amid weaker EV demand. The new agreement reads less like a return to blanket capacity growth and more like targeted spending on chemistries gaining traction in affordable EVs and stationary storage.

The framework also has a regulatory rationale. Both companies intend to jointly address new requirements in key markets, including stricter supply chain regulations in the United States and Europe. For procurement and materials planners at cell makers, that means a Korean-controlled chain from Argentine lithium through Pohang conversion to LGES cells is being positioned as a compliance asset, not just a cost play.

The seven-year frame significantly widens the collaboration beyond traditional high-nickel materials. The speed of the LFP entry in particular shows how sharply priorities in the battery industry have shifted toward cheaper chemistries.

What to watch next

Three checkpoints will tell whether the MoU hardens into volume. Watch the formal contract signing later this year, which should reveal the tonnage split across LFP, graphite and high-nickel products. Watch the Pohang conversion milestones ahead of the early 2027 LFP start. And watch how much of the NCM flow shifts toward recycled battery metals — the clearest indicator of whether the circular-economy language becomes procurement reality.