We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
POSCO Enters LFP Cathode Market With Major Long-Term Supply Deal
Read MoreHide Full Article
Key Takeaways
POSCO secured its first major LFP cathode order, supplying over 190,000 metric tons from 2027 to 2032.
POSCO is converting Pohang lines to LFP production, targeting customer certification and supply by late 2026.
POSCO plans to use steelmaking by-product iron oxide and Argentine lithium to improve LFP cost.
POSCO Holdings Inc. (PKX - Free Report) , via its subsidiary POSCO Future M, is strengthening its position in the global battery-materials industry as its unit makes a major entry into the lithium iron phosphate (LFP) cathode-material market.
POSCO has reached a large-scale, long-term supply agreement with a major South Korean battery manufacturer to supply more than 190,000 metric tons of LFP cathode materials over six years from 2027 through 2032. The two companies are expected to finalize the terms and sign a formal contract in the third quarter of 2026.
The agreement marks POSCO's first major LFP cathode-material order and represents an important diversification of its battery-materials portfolio, which has historically been focused on high-nickel cathode materials. LFP batteries are increasingly being adopted in energy storage systems (ESS) because of their lower cost, long cycle life and thermal stability. Demand for LFP-based ESS is rising rapidly in North America as electricity consumption increases and utilities and data-center operators invest in large-scale energy storage. The expansion of AI data centers is further supporting this trend by increasing demand for reliable power infrastructure.
To support the new business, POSCO has converted part of its Pohang facility's existing high-nickel cathode production lines to LFP production. Customer prototype certification is currently underway, with mass production and supply targeted to begin by the end of 2026. This approach allows the company to enter the LFP market relatively quickly while leveraging existing manufacturing infrastructure rather than relying entirely on new capacity.
A key competitive advantage will be POSCO Group's vertically integrated raw-material supply chain. POSCO plans to improve the cost competitiveness of its LFP cathode materials by using iron oxide generated as a by-product of POSCO's steelmaking operations along with lithium sourced from salt lakes in Argentina. This could help reduce raw-material costs and strengthen supply-chain security, which is particularly important as North American customers seek alternatives to Chinese battery-material suppliers.
The company is also pursuing additional cathode and anode material supply agreements with global battery manufacturers and automakers, leveraging its integrated supply chain and technological capabilities to navigate evolving trade regulations across key markets.
In March, POSCO secured a large-scale, long-term contract worth approximately KRW 1 trillion with a global automaker to supply synthetic graphite anode materials. To support growing demand, the company is investing approximately KRW 357 billion to establish a new synthetic graphite anode material plant in Vietnam, which will further expand its production capacity.
Separately, CNP New Material Technology, a joint venture between POSCO and FINO-CNGR, began construction of an LFP cathode-material plant at the Yeongil Bay General Industrial Complex 4 in Pohang in May. The facility is expected to begin mass production in 2027, with production capacity planned to be expanded in phases to as much as 50,000 tons annually.
PKX’s Price Performance
Shares of POSCO have gained 8.2% over the past year compared with a 22.5% decline in its industry.
The Zacks Consensus Estimate for CIB’s current-year earnings is pegged at $10.87 per share, indicating a 48.7% year-over-year decrease. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the average earnings surprise being 12.1%.
The Zacks Consensus Estimate for MMM’s current-year earnings is pegged at $8.96 per share, indicating a 11.2% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average earnings surprise being 4.1%.
The Zacks Consensus Estimate for GFF’s current fiscal-year earnings is pegged at $5.41 per share. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average earnings surprise being 6.6%.
View the Zacks #1 Rank List
Image: Bigstock
POSCO Enters LFP Cathode Market With Major Long-Term Supply Deal
Key Takeaways
POSCO Holdings Inc. (PKX - Free Report) , via its subsidiary POSCO Future M, is strengthening its position in the global battery-materials industry as its unit makes a major entry into the lithium iron phosphate (LFP) cathode-material market.
POSCO has reached a large-scale, long-term supply agreement with a major South Korean battery manufacturer to supply more than 190,000 metric tons of LFP cathode materials over six years from 2027 through 2032. The two companies are expected to finalize the terms and sign a formal contract in the third quarter of 2026.
The agreement marks POSCO's first major LFP cathode-material order and represents an important diversification of its battery-materials portfolio, which has historically been focused on high-nickel cathode materials. LFP batteries are increasingly being adopted in energy storage systems (ESS) because of their lower cost, long cycle life and thermal stability. Demand for LFP-based ESS is rising rapidly in North America as electricity consumption increases and utilities and data-center operators invest in large-scale energy storage. The expansion of AI data centers is further supporting this trend by increasing demand for reliable power infrastructure.
To support the new business, POSCO has converted part of its Pohang facility's existing high-nickel cathode production lines to LFP production. Customer prototype certification is currently underway, with mass production and supply targeted to begin by the end of 2026. This approach allows the company to enter the LFP market relatively quickly while leveraging existing manufacturing infrastructure rather than relying entirely on new capacity.
A key competitive advantage will be POSCO Group's vertically integrated raw-material supply chain. POSCO plans to improve the cost competitiveness of its LFP cathode materials by using iron oxide generated as a by-product of POSCO's steelmaking operations along with lithium sourced from salt lakes in Argentina. This could help reduce raw-material costs and strengthen supply-chain security, which is particularly important as North American customers seek alternatives to Chinese battery-material suppliers.
The company is also pursuing additional cathode and anode material supply agreements with global battery manufacturers and automakers, leveraging its integrated supply chain and technological capabilities to navigate evolving trade regulations across key markets.
In March, POSCO secured a large-scale, long-term contract worth approximately KRW 1 trillion with a global automaker to supply synthetic graphite anode materials. To support growing demand, the company is investing approximately KRW 357 billion to establish a new synthetic graphite anode material plant in Vietnam, which will further expand its production capacity.
Separately, CNP New Material Technology, a joint venture between POSCO and FINO-CNGR, began construction of an LFP cathode-material plant at the Yeongil Bay General Industrial Complex 4 in Pohang in May. The facility is expected to begin mass production in 2027, with production capacity planned to be expanded in phases to as much as 50,000 tons annually.
PKX’s Price Performance
Shares of POSCO have gained 8.2% over the past year compared with a 22.5% decline in its industry.
PKX’s Zacks Rank & Other Key Picks
PKX currently carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the Conglomerates space include Grupo Cibest S.A. (CIB - Free Report) , 3M Company (MMM - Free Report) and Griffon Corporation (GFF - Free Report) . CIB sports a Zacks Rank #1 (Strong Buy), while MMM and GFF carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CIB’s current-year earnings is pegged at $10.87 per share, indicating a 48.7% year-over-year decrease. Its earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with the average earnings surprise being 12.1%.
The Zacks Consensus Estimate for MMM’s current-year earnings is pegged at $8.96 per share, indicating a 11.2% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average earnings surprise being 4.1%.
The Zacks Consensus Estimate for GFF’s current fiscal-year earnings is pegged at $5.41 per share. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average earnings surprise being 6.6%.