POSCO Holdings Inc. PKX, through its subsidiary POSCO Future M, has signed a KRW 1.1 trillion contract with SK On to supply lithium iron phosphate (LFP) cathode materials from 2027 through 2029. The agreement, signed on Oct. 22, can be extended by two years upon mutual agreement and marks POSCO’s first cathode material supply deal with SK On.
POSCO Expands LFP Cathode Business
Under the agreement, POSCO Future M will supply LFP cathode materials to SK On for three years, with the contract extendable by an additional two years upon mutual agreement. The deal follows last month’s long-term agreement to supply 190,000 tons of LFP cathode materials to another Korean battery maker, highlighting the company’s accelerating entry into the LFP market.
POSCO has historically supplied anode materials to SK On. With the latest agreement, it will now provide both cathode and anode materials to SK On. The company also supplies cathode and anode materials to all three major Korean battery makers, broadening its customer base and supporting its long-term growth prospects.
PKX Targets Growing LFP Demand
LFP batteries offer lower power output than nickel-based chemistries such as nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminum (NCA) but benefit from lower costs and longer lifespans. Demand for LFP batteries is increasing in energy storage systems (ESS), particularly as electricity requirements rise with the expansion of AI data centers.
To address this growing demand, POSCO is expanding its product portfolio beyond its existing NCM and NCA cathode materials. The company recently completed the conversion of part of its high-nickel cathode production lines at its Pohang plant to manufacture LFP cathode materials. Mass production and supply are expected to begin by the end of 2026.
POSCO has also planned to improve the cost competitiveness and quality of its LFP cathode materials by adopting a new production process using lithium sourced from salt lakes in Argentina.
POSCO Expands Battery Material Capacity
Beyond LFP cathode materials, POSCO is pursuing additional investments to strengthen its cathode and anode material businesses. The company signed a KRW 1 trillion long-term supply agreement for synthetic graphite anode materials with a global automaker in March 2026 and plans to invest approximately KRW 357 billion in a new synthetic graphite anode material plant in Vietnam.
Meanwhile, a spherical graphite processing plant is under construction at the Saemangeum National Industrial Complex in Jeonbuk. The facility is expected to begin trial operations in early 2027, followed by completion and full-scale mass production in the second half of 2027.
Per PKX, the initiatives align with POSCO Group’s “Triple-Core” growth strategy, which focuses on industrial resources, strategic resources such as lithium and battery materials, and energy resources. The company aims to leverage its technology, supply-chain capabilities and diversified product portfolio to strengthen its competitiveness.
Price Performance of PKX
Shares of PKX have risen 20.7% over the past year compared with the industry’s 24.7% decline.
PKX’s Zacks Rank & Key Picks
PKX carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the Conglomerates space are Grupo Cibest S.A. CIB, ITT Inc. ITT and Griffon Corporation GFF. CIB sports a Zacks Rank #1 (Strong Buy) at present, while both ITT and GFF carry a Zacks Rank #2 (Buy). 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 surprise being 12.1%.
The Zacks Consensus Estimate for ITT’s current-year earnings is pegged at $8.25 per share, indicating a 22.8% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7.4%.
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 surprise being 6.6%.
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