Posco Future M: Nearing a bottom but recovery takes longer

Research evidence excerpt

Posco Future M: Nearing a bottom but recovery takes longer

Brian Ho, CFA +852 2123 2615 brian.ho@bernsteinsg.com 31 July 2026

• LFP: Management plans to enter the market through conversion of an existing 30kt cathode line by end-2026, followed by

a joint venture expansion in 2027. Unlike most non-Chinese competitors, POSCO Future M intends to leverage steelmaking

by-products, upstream lithium supply from POSCO's Argentina assets and proprietary spray-pyrolysis technology to lower

production costs. The company sees initial opportunities in US ESS markets and Korean cell manufacturers seeking non-

China supply chains. While strategically attractive, meaningful earnings contributions are unlikely before 2027-28 and

customer qualification remains ongoing

• Anode: The company has invested heavily to localize battery materials production and build a fully independent anode value

chain covering sourcing to processing. Posco currently has 75kt of natural graphite capacity and 8kt of synthetic graphite

capacity. In April 2025, it decided to set up a new subsidiary, Carbon New Materials Co., with a KRW396bn investment to

produce spherical graphite, a refined form of natural graphite used in anodes. The company is pushing ahead with artificial

graphite expansion, including line conversion for prototype shipment in May 2026 and mass production in 2H26, plus

Vietnam Phase 1 investment in progress with mass production scheduled in 2028.

• Materials for solid state battery: The company continues to develop solid-state cathodes, lithium-metal anodes and dry-

electrode technologies with commercialization targeted around 2028. While strategically important, these technologies

remain long-dated and have limited impact on our valuation today.

COMPANY VALUATION