POSCO Chemical Achieves Record High Sales and Operating Profit Amid Battery Boom

First Half Sales 803.2 Billion KRW... Record High for 8 Consecutive Quarters
Operating Profit 55.2 Billion KRW... Up 55.1% Year-on-Year

[Asia Economy Reporter Oh Hyung-gil] POSCO Chemical has achieved record-high sales and operating profit as a result of its investments in the battery materials business.

On the 21st, POSCO Chemical announced that its consolidated sales reached 803.2 billion KRW, a 67.3% increase compared to the same period last year. Operating profit and net income for the same period rose by 55.1% and 37.0%, respectively, to 55.2 billion KRW and 46.4 billion KRW.

Continuous expansion of battery material mass production and rising selling prices led to record-high sales for eight consecutive quarters.

In the battery materials business, the Chinese subsidiary Zhejiang Pohwa drove strong performance, and raw material price increases for lithium, nickel, and others?strategically procured in connection with the POSCO Group?were reflected in selling prices, resulting in sales of 395.1 billion KRW.

POSCO Chemical explained that the cathode materials business is experiencing continuous growth as the proportion of high-nickel products for electric vehicles with high profitability reached 91%, and the operating rates and yields of mass production lines being expanded domestically and abroad have increased. Cathode materials sales surged by an astonishing 1017% over three years, from 31.9 billion KRW in Q2 2019 when the business entered through the merger with POSCO ESM, to 348.6 billion KRW in Q2 this year.

POSCO Chemical plans to expand its global mass production capacity from the current 45,000 tons annually to 105,000 tons in 2022, 340,000 tons in 2025, and 610,000 tons in 2030 through increased investment.

Sales in the anode materials business reached 46.5 billion KRW, with an increased share of products for energy storage systems (ESS) and IT device batteries.

POSCO Chemical 2022 First Half Management Performance (Preliminary)

The lime chemical business saw increased sales and profits due to rising prices of products such as coal tar, but sales decreased by 3.2% from the previous quarter to 191.6 billion KRW due to reduced sales volume caused by blast furnace maintenance work. The refractory business recorded 133.8 billion KRW in sales due to decreased sales volume following changes in customer manufacturing facility construction schedules.

PMC Tech, a subsidiary producing needle coke, a raw material for electric furnace electrodes, achieved sales of 60.1 billion KRW and an operating profit margin of 27.7% thanks to increased operating rates and selling prices of electric furnaces in China.

POSCO Chemical expects that despite growth in the global electric vehicle market in the second half of the year, macroeconomic uncertainties and raw material and supply chain issues will continue. Accordingly, it plans to pursue investments in mass production capacity, diversification of customers and markets, expansion of orders from new customers, and advancement of raw material supply chains.

For cathode materials, the Gwangyang plant production line will be completed in the second half of this year with an annual capacity of 90,000 tons, the largest single-plant scale in the world. Plans also include the establishment of a joint cathode materials plant with GM in Canada, a new cathode materials plant in Pohang, and expansion of the cathode materials plant in China.

For anode materials, production lines for 15,000 tons of natural graphite anode materials in Sejong and artificial graphite anode materials in Pohang will be established, expanding production capacity from 82,000 tons this year to 170,000 tons in 2025 and 320,000 tons in 2030.

Focus will also be placed on expanding the product portfolio through research and development.

A POSCO Chemical official stated, "For cathode materials, we are preparing mass production of cathode materials with nickel content exceeding 90% to respond to the high-performance trend of electric vehicles, and plan to commercialize high-nickel NCA and LFP and high-manganese products for entry-level electric vehicles. For anode materials, we are also pushing to establish mass production systems for next-generation materials such as SiOx (silicon composite oxide) and Si-C (silicon carbon) products."

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