POSCO Chemical to Supply Anode Materials Worth 940 Billion KRW to US Ultium Cells

Battery Core Material Anode 6-Year Supply Contract

Operating manufacturing equipment at POSCO Chemical's artificial graphite anode material plant

[Asia Economy Reporter Oh Hyung-gil] POSCO Chemical has signed a supply contract worth 940 billion KRW for artificial graphite anode materials with Ultium Cells, a joint venture between LG Energy Solution and GM in the United States.

On the 4th, POSCO Chemical announced that it had signed a six-year anode material supply contract worth approximately 939.3 billion KRW with Ultium Cells from 2023 to 2028. The contract involves supplying artificial graphite anode materials produced at the Pohang plant to Ultium Cells.

Artificial graphite anode materials are mainly used in electric vehicle batteries because they have characteristics that increase battery charging speed and extend battery life compared to natural graphite anode materials. Although raw material procurement is difficult and manufacturing costs are high, they have mainly been produced in China. However, POSCO Chemical localized production by completing the Pohang plant with an annual capacity of 8,000 tons in December 2021.

In particular, POSCO Chemical internalized the entire value chain from raw materials to final material production by sourcing graphite raw material, needle coke, from its carbon materials subsidiary PMC Tech. The company’s strengths also include cost reduction and real-time quality control through independently developed manufacturing technology and the introduction of smart factory processes.

POSCO Chemical plans to strategically respond to supply chain strengthening policies such as the U.S. Inflation Reduction Act (IRA) by promoting anode material business locally in North America and Europe through partnerships with automakers and battery companies. Currently, the annual production capacity of anode materials is 82,000 tons, which is planned to increase to 170,000 tons by 2025 and 320,000 tons by 2030.

Previously, POSCO Chemical solidified its position as a key global supplier of electric vehicle battery materials by signing large-scale supply contracts for both cathode and anode materials with Ultium Cells. In May, it established Ultium CAM, a cathode material joint venture with GM in Quebec, Canada, and signed a contract to supply cathode materials worth over 21 trillion KRW in North America and Korea.

Min Kyung-jun, CEO of POSCO Chemical, stated, "As the only domestic anode material manufacturer, we have completed a full value chain from raw materials to material production, and our business competitiveness, built through expanding our product portfolio, has led to successful contract wins. Based on our proprietary technology and raw material competitiveness, we will actively expand our global customer base and grow both cathode and anode material businesses in balance to leap forward as a global top-tier battery material company."