Jan. 18, 2024 - In response to the U.S. Inflation Reduction Act (IRA) that excludes Chinese companies, POSCO Future M, a subsidiary of South Korea’s POSCO Group, will double its production capacity of artificial graphite anodes to over 36,000 tons by 2025.

According to the Ministry of Trade, Industry, and Energy on Wednesday, POSCO Future M is set to invest 400 billion won ($300 million) by the end of 2025 to expand its artificial graphite anode production scale and more than double its current capacity. The company, which currently produces around 8,000 tons of artificial graphite anodes, aims to increase this figure to 18,000 tons by the end of 2024 and 36,000 tons by the following year.

Anodes play a crucial role in determining battery lifespan and charging performance, and POSCO Future M is the only company in Korea producing graphite anodes with a graphite-based composition and notably, the entire production process, from raw materials to the final product, can be fully localized. The company gained attention in 2023 when it demonstrated the capability to produce 100 percent synthetic graphite in Korea, particularly at a time when China announced measures to control its graphite exports.

The artificial graphite anodes produced by POSCO Future M use needle coke produced from byproducts of the steelmaking process, specifically using pitch coke. POSCO Group directly produces needle coke via its subsidiary POSCO MC Materials.

The artificial graphite anodes from POSCO Future M are garnering attention as a key product to respond to the supply chain strengthening policies such as the U.S. IRA and the EU Critical Raw Materials Act (CRMA).

The Foreign Entity of Concern (FEOC) provision of the IRA states that starting in 2025, the use of key minerals produced by FEOCs will be ineligible for EV subsidies in the United States. The market for anode materials is largely dominated by Chinese companies, and the U.S. administration is defining almost all Chinese companies as FEOCs.

Given that graphite anodes are classified as a core mineral under the IRA, the exclusion of Chinese graphite anode manufacturers could potentially benefit POSCO Future M. Buoyed by the expansion of the electric vehicle market and the IRA policy, POSCO Group has outlined plans to establish an annual production system of 218,000 tons of anodes by 2026. This includes a natural graphite anode capacity of 154,000 tons, as well as artificial graphite anode and silicon graphite anode capacities of 58,000 tons and 6,000 tons respectively.