Posco Future M reported a sharp reversal to losses in the second quarter as the South Korean battery materials maker grappled with weakening demand for electric vehicle components and plunging raw material prices.
The company posted a net loss of 35.5 billion won ($25.5 million) for the three months ended June, compared with a profit of 48.9 billion won in the previous quarter. Revenue fell 27.8% from a year earlier to 660.9 billion won ($474.7 million), while operating profit plummeted 71.7% to just 773 million won.
The deterioration reflects broader challenges facing battery material suppliers as EV sales growth slows and commodity prices for key inputs like lithium and nickel remain depressed following their surge in 2021-2022. Posco Future M’s energy materials division was particularly hard hit, with quarterly revenue falling 37.6% from the previous quarter to 315.4 billion won.
The company attributed the decline to reduced sales of high-nickel cathode materials, which led to lower plant utilization rates and dampened profitability. Industry analysts note that some battery suppliers are currently selling products with minimal to no profit margins, creating financially unsustainable conditions across the sector.
Posco Future M expects improvement in the second half as its new precursor plant in Gwangyang begins full-scale production. The facility has capacity to produce materials for batteries powering 500,000 EVs annually. The company may also benefit from new U.S. tariffs of up to 721% on Chinese anode producers, potentially boosting demand for non-Chinese suppliers.
