POSCO Chemical Records All-Time High Performance... Battery Material Growth Accelerates

First Breakthrough of 3 Trillion KRW in Sales in 2022
Battery Material Share Exceeds Half

[Asia Economy Reporter Choi Seoyoon] Posco Chemical has surpassed annual sales of 3 trillion KRW, achieving the largest business performance since its founding, driven by growth in its battery materials business.

Posco Chemical announced on the 27th that it recorded consolidated sales of 3.3019 trillion KRW and an operating profit of 165.9 billion KRW last year. This represents increases of 66.0% and 36.3%, respectively, compared to the previous year. The operating profit margin was 5.0%.

The battery materials business posted sales of 1.9383 trillion KRW, up 127.6% year-on-year, and operating profit of 150.2 billion KRW, a 287.1% increase. The operating profit margin was 7.7%. This was thanks to increased sales volume and price rises driven by growing demand for electric vehicle batteries and new orders for energy storage systems (ESS).

In particular, battery materials accounted for 58.7% of total sales for the first time ever, securing its position as the core business as continuous investment results became visible. Among these, cathode materials supported explosive growth by recording more than double the sales.

POSCO Chemical Records All-Time High Performance... Battery Material Growth Accelerates

In the basic materials business, sales rose 19.8% year-on-year to 1.3636 trillion KRW due to increased sales of products such as refractories, quicklime, coal tar, and landscaping oil in the first half. However, operating profit was 15.7 billion KRW with an operating profit margin of 1.2%, showing weakness compared to the previous year due to reduced operating rates caused by flooding in Pohang’s Naengcheon area and a downturn in oil prices in the second half.

Subsidiary Posco MC Materials (formerly PMCTech), which produces high value-added products such as needle coke used as anode materials for artificial graphite and electrode rods, recorded stable results with sales of 252.2 billion KRW and operating profit of 39.2 billion KRW. Another subsidiary, P&OChemical, which manufactures hydrogen peroxide for advanced industries such as semiconductor etching, has been operating normally since its completion in October.

Posco Chemical expects business growth to continue this year, supported by expanded battery material production capacity and sales.

The world’s largest cathode material plant in Gwangyang, which was comprehensively completed last year with an annual capacity of 90,000 tons, will begin full-scale operation this year, and the first phase of the Pohang cathode material plant with an annual capacity of 30,000 tons is also scheduled to be completed within the year. The high-nickel cathode material plant being developed in Quebec, Canada, in a joint venture with General Motors (GM) is expected to be completed next year. Additionally, global production capacity expansion efforts aimed at entering key markets such as North America, Europe, and China in collaboration with leading global electric vehicle and battery companies are expected to materialize soon.

On the sales front, the joint battery company of GM and LG Energy Solution, Ultium Cells, is expected to lead sales expansion as it began its first supply earlier this year under a high-nickel cathode material contract worth 13.7697 trillion KRW signed last year. Posco Chemical is also currently negotiating with multiple partners for joint product development and supply, planning to sign large-scale sales contracts within the year to further accelerate growth.