Posco Chemical was slowing down its investment plans to expand the production capacity of natural graphite, TheElec has learned.
The South Korean chemical company aimed to secure production capacity of 90,000 metric tonnes per year by 2022 initially.
This has been lowered to 74,000 metric tonnes, people familiar with the matter said.
It is likely that it will lower its previous target of 105,000 metric tonnes per year by 2023 as well.
It is likely that Posco will focus on increasing the production capacity of synthetic graphite to increase profitability.
The company will keep its production rate of 44,000 metric tonnes per year in 2019 up to this year. It was initially planning to increase this to 50,000 metric tonnes.
Next year’s goal will also be lowered from the initial 80,000 metric tonnes to 64,000 metric tonnes.
However, cathode production will increase __ it plans to produce 69,000 metric tonnes by 2022 instead of the previous goal of 65,000 metric tonnes.
The expansion of electric vehicle battery market is increasing consumption of cathode and anode materials.
Cathode accounts for 40% of battery costs while anode takes up around 15 to 20%.
Cathode accounts for over 50% sales by Posco Chemical’s energy material business. As of the third quarter, cathode account for 69% of the business’ sales.
The energy material business is aiming for sales of 700 billion won this year. As of the third quarter, the business accumulated 333.4 billion won in sales, meaning it has to post 366.6 billion won in sales in the fourth quarter alone to meet its target. Accelerating cathode production can help with this goal. The business is aiming to post 1 trillion won in sales next year.