South Korean steelmaker Posco said Thursday that it has completed construction of a plant in China that will produce cathode materials for rechargeable batteries starting late this year.

Under a joint venture with China’s Huayou Cobalt, Posco built the plant in Zhejiang province, capable of producing 5,000 tons of cathode materials per year.

It is Posco’s first overseas plant for cathode material production, officials said. Posco holds 60 percent in the venture, with Huayou Cobalt taking the rest. 

The joint venture is called Zhejiang Posco-Huayou ESM or ZPHE. Huayou is the world’s largest supplier of cobalt, the key ingredient for secondary batteries. The company meets about half of global demand for the material.

The plant, located in Tongxiang city adjacent to plants that make batteries for electric vehicles, will also help Posco secure consistent orders, the company said. It could expand the plant’s production capacity if it sees more demand.

Amid waning demand for steel, Posco will put battery materials at the forefront of its business portfolio. By 2030, it plans to secure 20 percent of market share for anode and cathode materials and generate 17 trillion won ($14 billion) through the new business.

With the new plant in China, Posco will become capable of producing 45,000 tons of anode materials a year and will make additional investment according to market conditions, the company added.

By Cho Chung-un (christory@heraldcorp.com)