November 21, 2024

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Posco Future M’s high-nickel cathode manufacturing plant in Gwangyang, South Jeolla Province (Posco Future M)

Posco Future M said Thursday it has signed a 1.8 trillion won ($1.4 billion) deal to supply high-nickel cathode materials for electric vehicle batteries with a battery maker.

The details of the agreement including the other signing party will not be disclosed until Dec. 31, when the two companies will finalize the terms and conditions, according to Posco Future M.

“It is unusual to hold back the information on all the parties involved. But we agreed to respect the battery company’s request (of not making a full disclosure), considering the recent volatility and uncertainties within the industry,” said a Posco Future M official.

The deal volume takes up 38.8 percent of the battery material manufacturer’s sales revenue from last year. The official highlighted the significance of the mega deal as it comes during the worsening sentiment in the clean mobility market.

It is the company’s first agreement since June last year when it forged a 13.2 trillion won deal to supply cathode to Ultium Cells, the joint venture of LG Energy Solution and General Motors.

Bearing the brunt of the EV slump, Posco Future M announced in April it would cut the production target of cathode and anode for 2026 by 13.2 percent and 48.9 percent, respectively. Last week, it scrapped the investment plan of setting up a battery materials joint venture with China’s Huayou Cobalt. The company’s sales revenue in the second quarter also fell below 1 trillion won.

Despite the series of business adjustments, Kim Jun-hyung, general manager of the rechargeable battery materials division at Posco Holdings, the parent company of Posco Future M, recently noted that they are only minor adjustments, and the battery business remains a key driving force.

By Byun Hye-jin  (hyejin2@heraldcorp.com)