POSCO Chemical, 7 Consecutive Quarters of Record Quarterly Sales... "2030 Cathode Material Mass Production Target Up 45%"

by Moon Chaeseok

Published 25 Apr.2022 10:58(KST)

Exterior view of POSCO Chemical's cathode material plant in Gwangyang. (Photo by POSCO Chemical)

[Asia Economy Reporter Moon Chaeseok] POSCO Chemical has achieved its highest quarterly sales for seven consecutive quarters. As investments in the battery materials business have translated into results, the company has decided to increase its 2030 mass production capacity targets by 45% for cathode materials and 23% for anode materials. It also plans to diversify its product lineup, including nickel-cobalt-aluminum (NCA) and lithium iron phosphate (LFP) cathode materials.

POSCO Chemical announced on the 25th that its consolidated sales for the first quarter reached 664.6 billion KRW, operating profit was 25.5 billion KRW, and net profit was 36 billion KRW. Compared to the previous year, sales increased by 42.2%, while operating profit and net profit decreased by 25.2% and 9.5%, respectively. Compared to the previous quarter, sales rose by 23.7%, operating profit by 24.8%, and net profit by 87.4%.

The driving force behind the record-high sales for seven consecutive quarters was the battery materials business. This segment posted sales of 317.1 billion KRW, a 44.1% increase from the previous quarter. For cathode materials, sales increased by 48.1% to 272.2 billion KRW, driven by increased sales of high-nickel products for electric vehicle batteries and the reflection of raw material price hikes in selling prices. Anode materials also saw a 23.7% increase in sales to 44.9 billion KRW due to higher sales for electric vehicles and energy storage systems (ESS). The lime chemical business recorded sales of 197.9 billion KRW, up 6.6% from the previous quarter, reflecting raw material price increases in selling prices. The refractory business achieved sales of 136.6 billion KRW, up 13.8%, due to increased orders.

Net profit rose 87.4% to 36 billion KRW, largely influenced by strong performance from subsidiaries. PMC Tech, a subsidiary producing needle coke, recorded sales of 58 billion KRW and an operating margin of 17.8%, supported by increased sales due to the recovery of blast furnace operating rates in China. Zhejiang Pohang, a Chinese cathode material production corporation, posted sales of 45.7 billion KRW and an operating margin of 12.3%, driven by expanded cathode material sales.

POSCO Chemical, 7 Consecutive Quarters of Record Quarterly Sales... "2030 Cathode Material Mass Production Target Up 45%"

The company has decided to raise its 2030 mass production capacity targets for battery materials beyond the previous plan to accelerate business growth and respond smoothly to new customer orders. Cathode material capacity will increase from 420,000 tons to 610,000 tons, a 45% rise, and anode material capacity will increase from 260,000 tons to 320,000 tons, a 23% rise.

It also plans to expand its product portfolio. For cathode materials, it will first promote commercialization of high-nickel NCA and LFP for mass-market electric vehicles to diversify its product lineup. The NCA cathode material is currently establishing a mass production system, and LFP is expected to be commercialized early by securing raw materials and manufacturing technology. The company plans to establish global mass production bases centered on its main products, high-nickel NCM and NCMA cathode materials, in North America, Europe, Korea, and China.

In June, POSCO Chemical plans to complete the expansion of the 60,000-ton production line at its Gwangyang cathode material plant, increasing its capacity to 90,000 tons, the largest single-plant scale in the world. The Sejong anode material plant will also expand production lines for low-expansion natural graphite anode materials with a capacity of 15,000 tons. Through this, the company aims to secure annual production capacities of 105,000 tons for cathode materials and 84,000 tons for anode materials by the end of the year. A POSCO Chemical official said, "We plan to build a full portfolio covering premium, mass-market, and next-generation battery cathode and anode materials, and enhance business competitiveness by securing the value chain from raw materials such as lithium, nickel, graphite, and precursors to recycling in connection with the POSCO Group."