POSCO Future M has signed a KRW 1.1 trillion contract to supply lithium iron phosphate cathode materials to SK On. Deliveries are scheduled to run from 2027 through 2029, with an option to extend the agreement by two years.
The deal expands POSCO Future M beyond its traditional focus on nickel-based cathode materials. LFP batteries have lower energy density but are cheaper, have long cycle life and are increasingly used in energy-storage systems and some electric vehicles.
The company is also working to lower LFP production costs and plans to use lithium sourced from the POSCO group's Argentine brine assets in its production process.
For the two companies, the contract creates a defined domestic supply relationship in a battery segment where Korean manufacturers have been trying to narrow the cost gap with Chinese competitors.