A small excerpt from a story appearing inTHEELEC.The Korean...

A small excerpt from a story appearing in
THEELEC.

The Korean company is aiming to reduce its costs by 30% by 2027 but analysts believe this will be in the end a futile effort to narrow the price difference with its Chinese competitors.

Posco Future M has opted to use heat treatment instead of Acheson furnace to process is graphite, which it believes can reduce power consumption from 18,000kW to 8,000kW. Using heat treatment also forgoes the need for additives such as carbon black and other materials. To manufacture 600,000 tonnes of synthetic graphite, 4.5 million tonnes of these additives are needed, according to data from Hanwha Investment & Securities.

However, depreciation of furnaces already in use as well as technological challenges on converting to heat treatment means cost reduction effect will be limited, sources said.

Acheson furnace is also not used outside of China and this change is just a natural trend of the industry, they said.

Posco Future M said this month that it is also researching ways to use new materials to make natural graphite instead of using ores. The South Korean company currently imports 95% of its natural graphite from China.

It said that the research will allow Posco Future M to import materials besides ore from other countries to make its natural graphite.

One of the region it is attempting this is Africa, where it has signed import deals with Mozambique and Tanzania to procure graphite from mines there.

However, the current stark reality is that Chinese graphite anodes are over 50% cheaper than Posco Future M’s. The South Korean company said it reduced costs by 44% last year. But sources said a further reduction of 30% to this will still result in Chinese companies offering cheaper alternatives.

According to ICCSINO, China’s anode price stood at 35,000 yuan per tonne in early 2024, an over 40% drop from early 2023’s 53,000 yuan per tonne.