Why the Three Battery Companies Are Focusing on POSCO Chemical

NCMA Cathode Material Commercialization... Catalyst for Electric Vehicle Popularization
The Only Major Company in Materials Business... Emerging as a Key Player in the EV Value Chain

[Asia Economy Reporter Hwang Yoon-joo] The three major domestic battery companies?LG Chem, Samsung SDI, and SK Innovation?are paying attention to POSCO Chemical. This is because, as demand for electric vehicles increases, POSCO Chemical's role in the value chain connecting electric vehicles, batteries, and materials is also growing.

Since 2022, POSCO Chemical has been supplying NCMA cathode materials for electric vehicle batteries. This is intended for supply to global top-tier electric vehicle manufacturers, and recently, customer evaluations of prototypes have been completed.

NCMA cathode materials are products that add aluminum (Al) to the existing high-nickel NCM (nickel, cobalt, manganese composition) cathode materials. Generally, increasing the nickel content can increase battery capacity, but as the proportions of manganese and cobalt decrease, stability and output decline, creating technical limitations in raising nickel content above 80-90%.

The NCMA cathode materials developed by POSCO Chemical increase nickel content to over 80%, significantly boosting battery capacity. Using a proprietary Al doping process, aluminum is uniformly arranged within the physical structure of the material, and surface coating technology is applied to simultaneously enhance output and stability.

NCMA cathode materials are applied to third-generation electric vehicles capable of driving 500-600 km on a single charge. Once third-generation electric vehicles are commercialized, they will be able to compete fully with internal combustion engine vehicles, serving as a catalyst for the popularization of electric vehicles.

An electric vehicle battery industry official explained, "Most electric vehicle and battery companies are global large corporations, but battery materials are mainly produced by small and medium-sized enterprises, limiting large-scale supply. With POSCO actively entering the battery materials business, battery companies are paying attention because they can now receive stable material supplies."

Earlier, POSCO Chemical also made investments in cathode and anode materials, which are core materials for electric vehicle batteries. Cathode material facilities will expand from 40,000 tons at the beginning of the year to 100,000 tons in 2023. Artificial graphite anode material facilities are planned to reach 16,000 tons in 2023.

The reason POSCO Chemical is aggressively investing in the materials business is due to the explosive growth of the electric vehicle market alongside the electric vehicle battery market. Internally, the global electric vehicle market is expected to grow at an average annual rate of over 25%, from about 3 million units this year to more than 9.3 million units by 2025. Due to the rapid growth of the electric vehicle market, concerns have arisen that global electric vehicle battery supply will fall short of demand starting in 2022.

Reflecting this, with yield improvements at LG Chem’s Poland plant, POSCO Chemical is also expected to see sales growth starting from the third quarter of this year. The market expects consolidated sales for the third quarter to increase by 21.7% year-on-year to 452.4 billion KRW, while operating profit is expected to decrease by 7.4% to 25.9 billion KRW. With the popularization of electric vehicles, the main business is expected to shift from refractories to battery materials within the next three years, positioning POSCO Chemical to rise in the electric vehicle value chain.

Choi Bo-young, a researcher at Kyobo Securities, said, "Along with performance recovery, the expansion of next-generation cathode materials and investments in artificial graphite anode materials will sequentially yield results. As LG Chem’s large-scale EV battery investments increase material demand, the company’s strength in mass production will gradually become more prominent."

This content was produced with the assistance of AI translation services.