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POSCO Chemical takes first step in localization of production of anode coating material pitch by beginning construction of production plant
2022.09.21
  • Attendees after shoveling earth at the groundbreaking ceremony held on the 21st for P&O Chemical's production plant for pitch used for anodes. From the fourth from the left: Gongju mayor Choi Won-cheol, POSCO Chemical's head of the Planning and Support Division Kim Joo-hyeon, OCI vice president Kim Yu-shin and P&O Chemical president Kim Jong-guk.
- On the 21st, P&O Chemical, a joint venture company POSCO Chemical founded with OCI, began the construction of a pitch production plant with a capacity of 15,000 tons in Gongju, Chungcheongnam-do.
- POSCO Chemical has established a stable supply system for pitch, an intermediate material for anode production, by becoming capable of producing the material independently, which used to be imported entirely.
- POSCO Chemical has increased its business competitiveness by completing an entire value chain of anode production from raw materials to intermediate materials to final products.


POSCO Chemical, headed by President Min Kyung-jun, will, in conjunction with OCI, set out to localize the production of pitch, an intermediate material used to produce battery anodes. With the move, the company aims to secure a solid competitive edge in the global battery materials market by independently producing pitch, a material that has so far been entirely supplied by imports, thereby completing an entire value chain of anode production from raw materials to intermediate materials to final products.

On September 21, P&O Chemical, a joint venture company POSCO Chemical founded with OCI, held a groundbreaking ceremony for its pitch production plant at Tancheon Industrial Complex in Gongju-si, Chungcheongnam-do, South Korea. The event was attended by officials including POSCO Chemical's head of the Planning and Support Division Kim Joo-hyeon, OCI vice president Kim Yu-shin, P&O Chemical president Kim Jong-guk, and Gongju mayor Choi Won-cheol.

P&O Chemical plans to invest 96.3 billion KRW to build a production plant for pitch that is used for anodes with a capacity of 15,000 tons per year by 2023. Pitch is a carbon material produced from refining coal or petroleum, and it is used to coat the surfaces of anodes and also as a binder in the aluminum smelting process.

Pitch used for coating anodes is a petroleum-based, high-softening point type that melts at higher temperatures than common pitch, and it has a significant effect on battery performance as it can increase the battery's charge-discharge rate and extend the battery's lifespan. China and Germany are major producers of pitch, and for the South Korean industry, production of the material needs to be localized at all costs.

POSCO Chemical, the only company in South Korea that produces anodes and cathodes, will be able to receive a stable supply of high-quality, customized intermediate materials for anode production when the pitch production plant is completed. According to the industry, global demand for pitch used for anodes in 2025 will be approximately 150,000 tons, with that demand expected to soar along with the growth of the battery industry. P&O Chemical plans to supply its pitch preferentially for POSCO Chemical's anodes and to also sell it in the global market.

Once the plant starts running, POSCO Chemical will be able to increase its business competitiveness as it will have established an entire value chain for its anode material business, from raw materials to intermediate materials to final product production. POSCO Chemical has secured a supply of natural graphite through POSCO Group’s investment in mining rights in Tanzania and also supply of artificial graphite through its subsidiary PMCTECH's production of needle cokes *1). As for spherical graphite, which is an intermediate material, the company has established a supply chain through equity investment in Qingdao Zhongseok in China and internalization of pitch, and through that, the company is now equipped with a system that is capable of mass-producing both natural graphite- and artificial graphite-based anodes, which are final products.
* 1) Needle cokes: A carbon material manufactured through high-temperature processing of coal tar generated in the steelmaking process. Needle cokes are used as a raw material for artificial graphite anodes.
*2) Spherical graphite: An intermediate material obtained by processing graphite ore mined in mines into round particles after removing the impurities.

At the groundbreaking ceremony, POSCO Chemical's head of the Planning and Support Division Kim Joo-hyeon said, "Through our partnership with OCI, we are now able to localize the production of pitch used for coating anodes and thereby contribute to strengthening the competitiveness of the South Korean battery industry. We will further expand our cooperation with OCI in the field of high value-added advanced materials and secure further growth engines.”

OCI is the world's largest liquid pitch manufacturer and currently produces 530,000 tons of liquid pitch per year. It is also the only company in South Korea equipped with technology to produce pitch. With the plant scheduled to be built, OCI expects to be able to go beyond its existing business area of coal-based liquid pitch, which is produced through the use of by-products of the steelmaking process, and expand into the area of high value-added advanced materials, such as petroleum-based high softening point pitch used for battery materials, thereby expanding its profit base.

OCI vice president Kim Yu-shin said, “Through cooperation with POSCO Chemical, we have expanded our business into the field of high value-added electronic materials and have thereby secured a growth engine. We will strive to contribute to strengthening the competitiveness of South Korea’s domestic secondary battery industry by successfully carrying out South Korea’s first localization of the production of high softening point pitch, which is an essential material in the industry.”

P&O Chemical is a joint venture that was established in July 2020 with a 51% stake owned by POSCO Chemical and a 49% stake owned by OCI. P&O Chemical is engaged in projects involving advanced materials, such as ultra-high purity hydrogen peroxide, which is used in the semiconductor production process, and pitch used for anodes. Going forward, the two companies plan to make forays into various high value-added material businesses based on their competitive edges in raw materials and technology.
[Reference] POSCO Chemical's anode business value chain
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