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Photo = POSCO FutureM |
[Alpha Biz= Reporter Kim Jisun] POSCO Future M announced on September 4 that it has decided to cancel its planned investment of ₩1.2 trillion in a precursor plant at the Pohang Blue Valley National Industrial Complex, which was to be constructed in partnership with China's Huayou Cobalt.
Initially, POSCO Future M had signed a memorandum of understanding (MOU) with Huayou Cobalt, Gyeongsangbuk-do, and Pohang City, aiming to complete the facility by 2027. The plant was intended to produce precursors and high-purity nickel raw materials, with precursors being a critical component that accounts for 60-70% of the cost of cathode materials in batteries. However, due to a slowdown in electric vehicle (EV) demand, the company determined that the project was no longer viable.
In an official statement, POSCO Future M cited the decline in EV demand as the main reason for halting the project, noting that it was difficult to secure business viability under the current market conditions.
Additionally, some analysts suggest that the decision might be influenced by strategic considerations to reduce risks associated with China, especially after the United States designated China as a "Foreign Entity of Concern" (FEOC) under the Inflation Reduction Act (IRA). Despite this, POSCO Future M's other precursor production project, a joint venture with China's CNGR, which began construction last June, is proceeding as planned without any disruptions.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
