Posco Future M CEO Yoo Byung-ok and US Ambassador to South Korea Philip Goldberg have discussed the importance of stabilizing supply chains as the Korean battery material and chemical producer struggles to cope with declining anode prices due to competition from China.

According to Posco Future M on Tuesday, the US Ambassador visited the Korean company’s artificial graphite anode plant in Pohang, North Gyeongsang Province, the previous day.

“Despite being the only alternative for stabilizing the US anode supply chain, we are facing practical difficulties due to a two-year deferral of (Foreign Entity of Concern),” said Yoo, referring to a delay in US measures restricting electric vehicle-related firms' buying of certain minerals from China.

“We ask that the US government implement consistent policy measures for the stabilization of supply chains.”

The Biden Administration announced in May this year that it would grant EV makers a two-year reprieve until 2027 on sourcing some hard-to-trace minerals from China, such as graphite for anodes. This means US buyers of EVs with battery components containing minerals from FEOC -- China, Russia, Iran and North Korea -- are still eligible to receive a tax credit of up to $7,500 per vehicle. The delay in FEOC measures is likely to strengthen China’s dominance in the global graphite market.

Goldberg spoke about the importance of building supply chains that are not dependent on any one country, or subject to unfair trade practices.

Posco Future M, which has an anode production capacity of about 80,000 tons per year, has recently been hit by Chinese competition, hurting its profitability and operation rates. According to market intelligence firm SNE Research, Posco Future M ranked ninth on the list of the world’s biggest anode producers in the first quarter of this year, accounting for three percent of total production worldwide. It was the only company outside China to place in the top 10.

Posco Future M explained that its artificial graphite anode plant produces anode materials using needle cokes made from by-products of the steelmaking process. This provides it with a reliable domestic supply of raw materials and an advantage in terms of supply chain stability. According to the company, demand for artificial graphite anode materials has continued to rise as they result in longer battery lifespans and shorter charging times compared to natural graphite anode materials.