POSCO Chemical Secures Battery Material Business Trajectory... Signs Cathode Material Supply Contract with LG Chem

Supply of Anode Materials Worth 1.8533 Trillion KRW Over 3 Years from 2020
Accelerating Market Penetration of Electric Vehicle Battery Materials with High-Nickel Anode Materials

[Asia Economy Reporter Hwang Yoon-joo] Posco Chemical's battery materials business, identified as a new growth engine, is expected to stabilize on a steady track starting this year. Over the next three years, the company will accelerate its penetration into the electric vehicle battery materials market by signing a large-scale cathode material supply contract with LG Chem.

On the 21st, Posco Chemical announced that it had signed a cathode material supply contract worth 1.8533 trillion KRW with LG Chem. The contract period is three years, from 2020 to 2022.

Cathode materials are the most critical components that determine the capacity and output of batteries. Posco Chemical will supply high-nickel NCM cathode materials to LG Chem. Since a higher nickel content in cathode materials improves battery efficiency, these products are mainly used in electric vehicle batteries.

Through this contract, Posco Chemical has secured a large-scale order for high-nickel cathode materials, increasing its market share and laying the foundation for business growth. LG Chem has secured stable supplies of key battery materials ahead of the explosive growth in the electric vehicle market. The two companies have maintained close cooperation in this field since Posco Chemical entered the energy materials business in 2011.

Posco Chemical manufactures NCM cathode materials that maximize battery output while significantly enhancing surface stability, based on its unique material technology. Additionally, as part of the Posco Group, it has the advantage of producing key raw materials for cathode materials by entering the lithium business.

Posco Chemical is also focusing on securing a stable mass production system for cathode materials. It is gradually constructing an electric vehicle battery cathode material production plant with an annual capacity of 90,000 tons on a 165,203㎡ site?equivalent to the size of 20 soccer fields?located in the Gwangyang Yulchon Industrial Complex. The plan is to establish a smart factory with automated production and quality control processes and an integrated control system to maximize manufacturing and quality competitiveness.

Posco Chemical stated, "With this large-scale supply contract, we have begun to realize the achievements of the energy materials business promoted at the Posco Group level and secured future growth engines. We will continue to invest in research and development and expand production capacity, while broadening partnerships with domestic and international battery manufacturers to elevate the business to a global top-tier level."

Posco Chemical plans to focus investments in the energy materials business sector by developing next-generation materials through its secondary battery materials research center, establishing a natural graphite anode material production system with an annual capacity of 76,000 tons by 2022, and entering the artificial graphite anode material business, aiming to become a global leading company in chemicals and energy materials.