Due to High Electricity Costs, POSCO Future M to Build Artificial Graphite Plant in Vietnam

KRW 357 Billion Investment; Mass Production to Begin in 2028
Site Secured with Capacity for 55,000 Tons

Exterior view of POSCO Future M Pohang Artificial Graphite Anode Material Factory. POSCO Future M

POSCO Future M has decided to establish an artificial graphite anode material plant in Vietnam. The company plans to build the plant on a site capable of producing up to 55,000 tons annually. The decision to build the Vietnam plant is seen as an effort to secure competitiveness against Chinese products. Until now, POSCO Future M has been considered less price-competitive compared to China, mainly due to domestic electricity costs and other factors.

On March 5, POSCO Future M announced that its board of directors had resolved to invest approximately KRW 357 billion to construct an artificial graphite anode material plant in Thai Nguyen, an industrial city in northern Vietnam.

The company plans to break ground in the second half of this year and begin mass production in 2028. The plant will be established on a site that can be expanded to a capacity of about 55,000 tons, with plans to gradually scale up in line with additional orders. POSCO Future M did not disclose the specific production capacity of the first phase of the plant.

Artificial graphite anode material is advantageous for improving battery fast-charging performance and lifespan. Although demand is steadily increasing, reliance on certain countries remains high, making supply chain diversification critical. As such, artificial graphite anode material is attracting attention as a key material that requires diversification.

Currently, POSCO Future M operates an artificial graphite anode material plant in Pohang, North Gyeongsang Province, with an annual capacity of 8,000 tons. The company had previously stated its plan to invest KRW 400 billion by the end of 2025 to more than double the production capacity of its Pohang plant. However, in order to improve price competitiveness with China, the company has ultimately shifted its strategy toward constructing a plant in Vietnam.

According to the company, it plans to leverage manufacturing technology developed through domestic production experience to mass-produce more price-competitive products in Vietnam and supply them to global customers.

Vietnam offers the advantage of lower costs in areas such as investment, electricity, labor, and logistics compared to other Southeast Asian countries including Indonesia, making it possible to secure competitive production costs. In addition, Vietnam has established industrial infrastructure, including its power grid, and is pursuing export-driven economic growth while creating favorable trade conditions with major countries such as the United States.

Last year, the United States introduced the Prohibited Foreign Entity (PFE) requirement as part of the Inflation Reduction Act (IRA), while Europe established goals under the Critical Raw Materials Act (CRMA) to reduce reliance on certain countries for strategic raw materials. Both regions are actively working to restructure their supply chains.

POSCO Future M began localizing natural graphite anode material in 2011 and completed its artificial graphite anode material plant in Pohang in 2021, thereby establishing a mass production system. The company is working to expand its production capacity for both natural and artificial graphite anode materials and is also pursuing commercialization of silicon anode materials.

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