POSCO Chemical posts record third-quarter sales, operating profit

POSCO Chemical Co., a unit of South Korea’s steel giant POSCO Holdings Inc., on Monday posted record revenue and operating profit in the third quarter, boosted by strong sales of electric vehicle battery materials.

The company posted 1.05 trillion won ($728 million) in preliminary sales in the three months to September on a consolidated basis, up 109% from the same period a year earlier. Its sales revenue has increased for nine straight quarters, it said.

Consolidated operating profit rose 160% to 81.8 billion won.

POSCO Chemical is the only Korean supplier that can produce both cathode, a key material for electric-vehicle batteries, and anode, another building block of lithium-ion batteries.

Cathode materials are made up of nickel, lithium and other materials, and comprise around 40% of the cost of electric vehicle batteries.

The company said its battery business sales increased 239% on-year in the third quarter.

Cathode sales gained 283% to 658.3 billion won while anode sales increased 60% to 68.4 billion won, it said.

DEAL WITH FORD IN THE OFFING

Last week, industry sources said POSCO Chemical is expected to forge a long-term contract to supply cathode to US automaker Ford Motor Co.

Ford Motor Chief Executive Jim Parley, who made an unannounced trip to Seoul last month to meet with Korean battery makers to discuss issues surrounding the US EV tax credit law, also met with POSCO CEO Choi Jeong-woo on Sept. 20.

During the undisclosed meeting, Parley sought to secure cathode, the ingredient for rechargeable batteries, from POSCO Chemical, people close to the matter said.

In July, POSCO Chemical signed a three-year cathode supply contract with General Motors Co.

Under the 13.8 trillion won deal, POSCO Chemical agreed to supply the material to Ultium Cells LLC, GM's EV battery cell manufacturing JV with Korea’s LG Energy Solution Ltd. from next year through 2025.

Write to Seo-woo Jang at suwu@hankyung.com
In-Soo Nam edited this article.