This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:55 p.m. on May 21, 2026.
POSCO FUTURE M will liquidate all its equity investments in a Chinese synthetic graphite anode company. Amid the electric vehicle chasm (temporary demand slowdown) and tighter U.S. foreign entity of concern (FEOC) rules, the move is seen as reducing exposure to Chinese anode materials and shifting weight to North America and Korea.
According to the investment banking (IB) industry on the 21st, POSCO FUTURE M decided to sell the entire remaining 8.30% equity in the Chinese synthetic graphite anode producer "Inner Mongolia Shinuo New Material Technology Co., Ltd." This follows a shareholders' agreement previously signed by the two sides, and the disposal is said to come as Guomin Jishu, the largest shareholder with call option rights, exercised its purchase right.
Inner Mongolia Shinuo is a producer of synthetic graphite anode materials in China. POSCO FUTURE M (then POSCO Chemical) participated in Inner Mongolia Shinuo's paid-in capital increase in Nov. 2021 and acquired a 15% equity stake. It was a strategic investment to preemptively secure a supply chain for synthetic graphite anodes in response to the rapidly growing electric vehicle battery market at the time, and to obtain sales rights for domestic clients and the right to participate on the board.
But the market environment changed rapidly afterward. As the U.S. Inflation Reduction Act (IRA) and FEOC rules took effect in earnest, reliance on Chinese battery materials emerged as a risk factor, and the slowdown in electric vehicle demand further cooled global anode market conditions. In fact, as Chinese anode makers faced lower utilization rates and intensifying price competition, Korean battery material corporations are also accelerating supply chain restructuring.
The deal structure between the two sides also changed in the process. The initial contract included a clause that if POSCO FUTURE M failed to meet the mandatory purchase volume totaling 1,000 tons for three years after the capital increase, the largest shareholder, Guomin Jishu, could buy back POSCO FUTURE M's held equity at the original investment price under a call option. If that condition materialized, POSCO FUTURE M faced a structure in which it could lose its board appointment rights along with a decline in its equity ratio.
Subsequently, POSCO FUTURE M signed a supplemental agreement with Guomin Jishu's side and readjusted the investment recovery structure. In this process, it first exercised a put option on part of the equity, and POSCO FUTURE M's equity ratio in Inner Mongolia Shinuo fell from 10.11% to 8.30%.
The equity sale is seen as the result of aligned interests on both sides. If POSCO FUTURE M exercised the put option, the largest shareholder would have to pay the exercise price plus simple interest of 4% per year, but under the supplemental agreement, Guomin Jishu's side could exercise the call option regardless of whether the put option was exercised. The industry believes that, as POSCO FUTURE M also had an incentive to reduce exposure to the Chinese anode business, the two sides reached agreement through consultations to dispose of the remaining equity.
The market interprets the deal as an extension of POSCO FUTURE M's supply chain diversification strategy. POSCO FUTURE M has recently been focusing on reorganizing a North America-centered supply chain and establishing a domestic synthetic graphite production system. The company is also pushing to build a synthetic graphite anode production base in Vietnam to reduce dependence on China.
An industry official said, "In the past, merely securing a local production base in China was a competitive edge, but now responding to FEOC rules and building a de-China supply chain have become core tasks," and added, "From POSCO FUTURE M's standpoint, it would have been a more realistic choice to unwind rather than hold a Chinese local investment equity for the long term."