Posco Chemical inks 40-trillion-won deal with Samsung SDI

Industry

Published: 30 Jan. 2023, 18:33

Posco Chemical inks 40-trillion-won deal with Samsung SDI

Samsung SDI CEO Choi Yoon-ho, left, and Posco Chemical President Kim Joon-hyeong pose for a photo after signing a cathode deal. [POSCO CHEMICAL]

Posco Chemical inked a 40-trillion-won ($32.6 billion) deal with Samsung SDI for high-nickel cathodes.

Under the contract, Posco Chemical will provide Samsung SDI with high-nickel cathodes for its nickel-cobalt-aluminum (NCA) batteries for 10 years starting later this year.

It is the biggest contract Posco Chemical has ever signed in the company's history, in terms of both money and time.

NCA cathodes are known for their efficiency in maximizing the energy density and output of a battery.

Cathodes are a core material in batteries along with anodes, separators and electrolytes. They play a vital role in deciding the price of a battery because they account for up to 40 percent of a battery's cost.

"Our efforts to expand our business portfolio and advance competitiveness in the fast-growing EV industry have produced tangible results," said Posco Chemical President Kim Joon-hyeong.

"By producing internationally recognized cathodes in cooperation with Samsung SDI, we will endeavor to strengthen our position as a leader in the global battery market."

Posco Chemical’s cathode plant in Gwangyang, South Jeolla [POSCO CHEMICAL]

Battery material business is one of Posco Chemical's major focuses lately. It currently has five products on sale and is in the process of developing cathodes for lithium-iron-phosphate (LFP) batteries. LFP batteries are relatively cheap and are less dangerous in terms of fire risk, and are being utilized by Chinese manufacturers.

Posco Chemical signed two cathode deals with Ultium Cells, a 50-50 joint venture between LG Energy Solution and General Motors, worth a total of 21.8 trillion won.

It is supplying high-nickel NCMA — nickel, cobalt, manganese and aluminum-based — batteries to the joint venture through 2033. NCMA batteries excel in capacity, durability and resistance and even support quick charging.

"The latest cooperation with Posco Chemical will help advance the achievement of Samsung SDI's vision to become a top-tier player in the sharply growing EV battery market," said Samsung SDI CEO Choi Yoon-ho.

Posco Chemical recently finished the construction of the world’s largest cathode plant in Gwangyang, South Jeolla. It will have 90,000 tons of annual capacity, which can make enough batteries for 1 million EVs.

The Gwangyang facility boosted Posco Chemical's total cathode production capacity to 105,000 tons. It has a 10,000-ton plant in Gumi, North Gyeongsang, and a 5,000-ton plant in Hangzhou, China.

Posco Chemical aims to increase its cathode capacity to 340,000 tons in 2025 and 610,000 tons in 2030.

It is currently building a 60,000-ton facility in Pohang, North Gyeongsang, a 30,000-ton facility in Hangzhou, China, and a 30,000-ton facility in Quebec, Canada.

Posco Chemical shares closed up 3.07 percent to 218,000 won on Monday.

BY SARAH CHEA [chea.sarah@joongang.co.kr]