As concern grows over potential disruptions in graphite supply—the core of anode materials for secondary batteries—due to China's tighter controls on rare earths, POSCO FUTURE M's de-China supply chain is coming into focus. POSCO FUTURE M is sourcing natural graphite from Africa and other regions instead of China and is the only company in Korea producing synthetic graphite.
POSCO FUTURE M recently signed a 670 billion won supply contract for natural graphite anode materials with global finished-vehicle corporations. This is equivalent to 18.1% of last year's sales (3.6999 trillion won), the largest since it began the secondary-battery anode materials business in 2011. The contract runs for four years starting in Oct. 2027 but could be extended up to 10 years depending on future negotiations.
As China, locked in a trade war with the United States, signaled it would tighten exports of key minerals such as rare earths, demand for non-Chinese anode materials is rising among global finished-vehicle makers and the battery industry. Since Dec. 2023, China has been controlling graphite exports, and the scope and intensity of the measures are becoming more stringent.
Graphite, needed to manufacture anode materials for secondary batteries, is one of the key minerals highly dependent on Chinese supply. According to the Korea International Trade Association, last year Korea's dependence on China for natural graphite and synthetic graphite reached 97.6% and 98.8%, respectively. China is the world's largest producer and exporter of graphite.
POSCO FUTURE M has been building its own supply chain through investments in African mines and the production of synthetic graphite. It has signed consecutive anode material supply contracts not only with the three domestic battery makers—LG Energy Solution, SK On, and Samsung SDI—but also with Japanese battery companies, including Panasonic.
POSCO FUTURE M has diversified its natural graphite supply chain to Africa. It signed a contract with Australian miner Syrah Resources and is importing graphite mined from the Balama mine in Mozambique, Africa, and its affiliate POSCO International's investment in the Mahenge mine in Tanzania is also expected to help secure non-Chinese graphite.
It is also the only company in Korea producing synthetic graphite. Synthetic graphite uses needle coke made by processing coal tar, a byproduct from POSCO's steelmaking process, as a raw material. For now, synthetic graphite (8,000 tons) accounts for about 10% of total anode material production capacity (82,000 tons).
While searching for another natural graphite mine to invest in, POSCO FUTURE M is also pushing to localize spherical graphite (graphite with rounded particles), which is needed in the process of manufacturing synthetic graphite. POSCO FUTURE M aims to produce with African natural graphite at its domestic plant starting in 2027.
In the global anode materials market, POSCO FUTURE M has the highest market share among non-Chinese corporations. According to market research firm SNE Research, last year the top 1–10 in global anode shipments were all Chinese corporations, with a combined market share exceeding 80%. POSCO FUTURE M ranked 11th with a market share of about 1.3%.