Posco Future M Begins Early Production of NCA Cathodes at New South Korea Plant

Posco Future M

South Korean materials giant Posco Future M, a subsidiary of the Posco conglomerate, has commenced early production at its new nickel-cobalt-aluminum (NCA) cathode plant in Pohang, North Gyeongsang province. The plant, which boasts an annual production capacity of 30,000 tonnes, was originally scheduled to begin operations in 2025 but has accelerated due to “customer requests.”

Posco’s NCA cathode output is crucial as global battery manufacturers seek high-quality cathode materials to meet demand for electric vehicles (EVs). The early start aligns with Posco Future M's 10-year agreement with Samsung SDI to supply high-nickel NCA cathodes, part of a broader push to establish South Korea as a leading player in the EV supply chain.

Expanding Production Capacity Amid EV Market Challenges

Posco Future M is actively expanding its cathode production capabilities with another plant under construction in Gwangyang, South Jeolla province, which is expected to add 52,500 tonnes per year by 2026. This will bring the company's total cathode material production capacity to 248,500 tonnes per year across its two plants by 2026. Despite this expansion, the firm has revised its initial target of 320,000 tonnes by 2025, reflecting the current slowdown in the global EV market.

The slowdown has also impacted Posco’s joint ventures and new plant projects. In September, the company postponed its plans for a nickel sulfate and battery precursor plant with China’s Huayou Cobalt, as well as its high-nickel cathode active material (CAM) facility in Quebec, Canada, a joint effort with General Motors, citing “local conditions.”

China Nickel Sulphate Market Holds Firm Amid Supply Tightness and Weak NCM Demand

Nickel Sulphate

China nickel sulphate prices have remained stable for over a month due to constrained supply and sluggish demand from the NCM battery sector. Despite declining output and elevated feedstock costs, producers have resisted lowering prices to protect margins. The China nickel sulphate market is now facing a complex supply-demand imbalance shaped by both upstream disruptions and shifting downstream preferences.

Feedstock Supply Disruptions Tighten Production Margins

Nickel sulphate output in April dropped to 30,000 tonnes (nickel metal equivalent), down 13% month-on-month and 18% year-on-year. Cumulative output for January–April stood at 127,000 tonnes, 1.6% lower than the previous year, according to CNIA data. This production cut stems from limited availability of mixed hydroxide precipitate (MHP) and nickel matte, both critical inputs for sulphate production. Heavy rainfall in Morowali, Indonesia, disrupted MHP production in March and April, reducing output by 5,500 tonnes. At the same time, matte producers in China shifted to more profitable nickel pig iron (NPI), reducing matte availability. Consequently, the payable indicators for MHP and matte rose significantly, eroding margins and compelling some plants—like those in Guangxi—to convert from matte to MHP feedstock. These factors have kept the China nickel sulphate market tight despite weak demand.

NCM Battery Demand Shrinks as LFP Dominance Grows

While supply tightens, demand has faltered. NCM and NCA batteries, once dominant, have lost significant market share to lithium iron phosphate (LFP) chemistries. As of April, NCM batteries accounted for just 20% of China’s battery output, while NCA stood at 17%, down from a combined 65% in 2019. This shift has impacted upstream nickel demand, causing several international projects to stall. In recent months, Eramet and BASF withdrew from their Weda Bay refining JV, and Hanrui Cobalt cancelled its MHP investment in Indonesia. Meanwhile, automakers like Volkswagen are pivoting toward LFP technology to cut costs. Demand for NCM batteries is expected to remain weak through Q2 2024, with some exporters front-loading shipments earlier in the year due to global trade tensions. As a result, the China nickel sulphate market remains under pressure, with producers navigating tight margins amid uncertain downstream growth.

The Metalnomist Commentary

China’s nickel sulphate market exemplifies the structural turbulence within the EV battery supply chain. As feedstock constraints collide with weakening demand for NCM chemistries, producers must brace for lower growth visibility and rising volatility across Asia’s nickel value chain.

Battery Metals Demand Faces Slower Path as Hybrid Vehicle Growth Extends

Battery Metals

Battery metals demand could face a slower growth path as carmakers and suppliers expect hybrids and range extenders to remain important for longer than earlier electric-only transition models assumed. Speakers at the FT Future of the Car summit said vehicle decarbonisation should be measured by emissions reduction, not only battery electric vehicle share.

Battery metals demand remains structurally supported by electrification. However, a longer hybrid phase could reduce near-term demand intensity for lithium, nickel, cobalt and manganese because hybrid vehicles use smaller battery packs than full battery electric vehicles.

Battery metals demand assumptions are therefore becoming more complex. Automotive electrification is still progressing, but the industry is moving toward a mixed powertrain future rather than a simple shift from combustion engines to full BEVs.

Horse Powertrain chief executive Matias Giannini said half of passenger vehicles could still be produced with some form of combustion or hybrid powertrain by 2040. That outlook would keep investment flowing into efficient hybrid systems alongside EV platforms.

Hybrid Growth Changes the Battery Raw Materials Curve

Hybrid vehicle growth could temper the pace of battery raw material demand without reversing electrification. Hybrids and range extenders still require electric motors, inverters, wiring and batteries, but their battery packs are much smaller than those used in BEVs.

This matters most for nickel. High-nickel NCM and NCA batteries are closely tied to longer-range BEVs, where larger packs are needed to deliver performance and driving range.

A slower BEV ramp-up could delay some of the nickel sulphate demand growth that has supported investment cases for new battery-grade nickel projects. It could also affect cobalt and manganese demand in cathode chemistries exposed to full EV penetration rates.

Lithium remains supported across almost every electrification pathway. Still, a longer hybrid transition could slow the rate at which large-format BEV batteries absorb lithium units.

The shift does not mean automotive metals demand will weaken across the board. Hybrids use more copper than conventional combustion vehicles because they require electric motors, power electronics and more complex wiring systems.

Continued hybrid and combustion production also supports aluminium castings, stainless steel, exhaust components and engine-related materials. Meanwhile, BEV growth still supports aluminium lightweighting, copper wiring, charging infrastructure and battery materials.

The result is a less linear automotive metals outlook. Battery metals may grow more slowly than aggressive BEV scenarios suggest, while broader automotive metals consumption remains supported by platform complexity and mixed powertrain production.

Policy Flexibility Could Reshape European Metal Demand

European suppliers are pushing for more flexibility in the EU regulatory framework. Current policy remains heavily weighted toward full electrification through tailpipe emissions targets.

The EU targets a 100% reduction in tailpipe emissions from new cars and vans from 2035. That effectively ends new combustion engine sales unless future exemptions are created.

Industry participants increasingly want a more technology-neutral route. They argue that hybrids, range extenders, renewable fuels and lower-carbon manufacturing should contribute to emissions reduction alongside BEVs.

This policy debate matters for metals. Battery material demand depends heavily on BEV penetration, average pack size and chemistry choice.

If Europe allows a longer role for hybrids and range extenders, lithium-ion battery capacity demand per vehicle could grow more slowly. That would affect demand forecasts for lithium, nickel, cobalt and manganese.

Chinese EV and hybrid technology is also improving quickly. This puts pressure on European and US automakers to share development costs across BEV, hybrid and range-extender platforms.

For suppliers, the strategic issue is flexibility. Companies tied only to high-growth BEV battery assumptions may face demand timing risk, while suppliers serving copper, aluminium, stainless steel, electronics and hybrid systems may benefit from a broader platform mix.

The automotive transition is still real, but the material demand path is becoming more diversified. Metals markets must now track powertrain mix, not only EV sales headlines.

The Metalnomist Commentary

Hybrid growth does not weaken the energy transition, but it changes the metals timing. Battery metals demand will still rise, yet copper, aluminium and hybrid-related materials may capture more value if automakers choose a longer mixed-powertrain route.

China's GEM Increases Battery Material Sales in 1H

Sales Surge Driven by Full Capacity

Green Eco-Manufacture (GEM), a leading Chinese cobalt refiner and lithium cathode active material (CAM) precursor producer, reported a significant increase in sales of CAM precursors, cobalt, and nickel for the first half of the year. The company attributed this rise to full capacity operations across its main product lines.

GEM's sales of ternary precursors, including lithium nickel-cobalt-manganese (NCM) and lithium nickel-cobalt-aluminium (NCA), surged by 45% year-on-year to exceed 100,000 tons. The firm also experienced a remarkable 133% increase in ternary CAM sales, reaching 7,119 tons.

Expansion and Strategic Partnerships

In August, GEM secured a supply agreement with South Korean lithium-ion battery CAM manufacturer Ecopro for 265,000 tons of ternary precursors from 2025 to 2028. The company is also expanding its production capabilities, with a new 50,000 tons per year ternary precursor plant in Indonesia set to start operations in the latter half of this year.

GEM's cobalt tetroxide sales soared by 163% year-on-year to 10,500 tons, driven by higher demand from the consumer electronics sector. The company sources cobalt from long-term contracts with Switzerland-based Glencore and from its mixed hydroxide precipitate (MHP) projects in Indonesia.

Nickel Production and Cost Reduction Goals

GEM's nickel MHP shipments from its QMB project in Indonesia doubled to over 20,000 tons nickel metal equivalent during January-June, with a full capacity rate. The firm plans to expand its nickel smelting capacity to 150,000 tons per year by year-end and aims to ship 60,000 tons of MHP in 2024. GEM also targets reducing MHP smelting costs to $7,500 per ton by the end of the year, benefiting from decreased sulfuric acid costs.

The company is involved in recycling power batteries, cobalt, nickel, and tungsten scrap, with recycled cobalt shipments reaching 8,987 tons and power battery recycling up by 37% to 16,300 tons or 1.84 GWh in the first half of the year.

GEM serves a global client base, including South Korean firms like Ecopro, Samsung SDI, SK On, and LGC, Chinese companies such as XTC New Energy Materials and BYD, as well as international entities like Umicore, Sandvik, and Kennametal.

GEM Ultra-High Nickel Precursor: Mass Shipments Begin from Jinmen

GEM

GEM ultra-high nickel precursor shipments have started, marking a scale breakthrough in EV battery materials. The company will ship 2,000 t/month from its Jinmen plant. As a result, the GEM ultra-high nickel precursor will supply major international battery makers. The milestone positions the GEM ultra-high nickel precursor at the center of next-gen high-energy cathode supply.

Core–shell design targets energy and safety

GEM launched a 9-series quaternary core–shell precursor at mass scale. The three-layer structure upgrades a traditional single-layer design without changing metal ratios. Therefore, manufacturers can raise energy density, cycle life, and safety. Nickel-rich NCM and NCA lines benefit, while safety has long challenged high-nickel chemistries. Meanwhile, GEM’s 8-series core–shell debuted in 2022, with the 9-series unveiled in April.

Shipments accelerate premium cathode supply chains

GEM will dedicate all 2,000 t/month to leading global firms. This supports gigafactory ramps as EV ranges push higher. Moreover, the material suits solid-state batteries under active development. GEM remains a top cobalt refiner and CAM precursor producer. Ternary precursor shipments reached 189,000t in 2024, up 5pc year over year. Consequently, downstream buyers gain volume and design flexibility without requalifying metal blends.

Ultra-high nickel platforms expand OEM options under cost and tariff pressure. However, qualification, safety validation, and powder morphology control remain critical. As a result, process stability at Jinmen will determine long-run competitiveness. Battery makers will watch swelling, thermal runaway margins, and impurity management.

The Metalnomist Commentary

GEM’s core–shell architecture balances high nickel with durability and safety, which buyers demand. Watch how quickly 9-series wins long-term offtakes beyond pilot lines. If Jinmen sustains quality at volume, rivals must match layered particle engineering, not just nickel content.

GEM raises CAM and cobalt tetroxide sales amid shifting battery supply chains

GEM

GEM raises CAM and cobalt tetroxide sales in the first half of 2025. GEM raises CAM and cobalt tetroxide sales on stronger consumer electronics demand and Indonesian feedstock growth. As a result, GEM raises CAM and cobalt tetroxide sales while ternary precursor shipments decline.

Product mix shifts and headline numbers

GEM’s cobalt tetroxide shipments reached 14,590t, up 39% year on year. CAM sales rose 74% to 12,399t. However, ternary precursor shipments fell about 14% to 86,000t. The mix reflects electronics-led cobalt oxide demand and slower NCM and NCA precursor offtake.

Securing feedstock with Indonesian MHP capacity

GEM secures cobalt feedstock via Glencore contracts and its Indonesian MHP projects. Total smelting capacity reached 150,000 t/yr nickel metal equivalent in 2024. In January–June, Indonesia produced 43,977t nickel metal equivalent and 3,667t cobalt metal equivalent. Therefore, MHP output mitigated DRC export risks since the 22 February cobalt ban.

Downstream positioning and long-term contracts

GEM signed a supply deal with EcoPro for 265,000t of ternary precursors in 2025–28. The firm also supplies CATL, BYD, LGES affiliates, and Kennametal. Meanwhile, its closed-loop footprint spans battery recycling, cobalt salts, CAM, cobalt metal and powders, and nickel metal.

The Metalnomist Commentary

GEM’s strategy balances near-term cobalt oxide strength with longer-dated ternary commitments. Indonesian MHP integration meaningfully hedges geopolitical risk and price volatility. Watch precursor recovery timing versus EV demand, and CAM margin discipline.

Yuneng to Expand LFP and LMFP Cathode Capacity to Meet Battery Market Growth

Yuneng

$899 Million Investment Targets Higher Energy Density Materials

Hunan Yuneng, China’s largest lithium iron phosphate (LFP) cathode active material producer, will significantly expand production capacity to serve surging demand in the lithium-ion battery sector. The company plans to raise 4.8bn yuan ($899mn) for a new project producing 320,000 t/yr of lithium manganese iron phosphate (LMFP), 75,000 t/yr of ultra-long cycle LFP, and 100,000 t/yr of iron phosphate feedstock.

The LMFP line, located in Anning, Yunnan province, will also be able to produce LFP. Yuneng expects construction to finish within four years. Meanwhile, the ultra-long cycle LFP and iron phosphate plants in Fuquan, Guizhou province, will be built within 12 months, strengthening the company’s diversified product portfolio.

Performance Advantages and Market Competition

LMFP cathodes provide higher energy density, longer driving ranges for EVs, better winter performance, and lower manufacturing costs than standard LFP. However, they have shorter life cycles and weaker charge-discharge capacity. Major players such as CATL, BYD, and Eve Energy are also investing in LMFP technology, intensifying competition in the high-performance cathode market.

Yuneng achieved 101% LFP capacity utilization in 2024, producing 735,462t—up 46% from 2023. Sales reached 710,565t, with 41% directed to the energy storage sector. LFP batteries continue to dominate China’s lithium-ion battery market, holding an 80% production share from January to April 2024, far exceeding the share of ternary chemistries such as NCA/NCM.

Strategic Outlook for Cathode Materials Expansion

By expanding LFP and LMFP output, Yuneng positions itself to capture additional market share as both EV adoption and energy storage demand accelerate. The cost advantage of LFP remains a key factor in China’s battery market dominance, while LMFP technology offers potential for premium applications once lifecycle limitations are addressed.

The Metalnomist Commentary

Yuneng’s investment demonstrates how Chinese cathode producers are racing to scale capacity in response to both domestic and global demand. While LFP will remain the dominant chemistry in China’s battery market, LMFP could emerge as a niche solution for applications requiring higher energy density—if manufacturers can resolve its durability challenges.