Editor's Note: This article is the seventh installment in our series on Asia's top 100 companies, exploring the strategies, challenges, and innovations driving the region's most influential corporations.
SEOUL, February 19 (AJP) - For the 15th consecutive year, South Korean steelmaker POSCO has retained its title as the "World's Most Competitive Steelmaker," according to global steel analysis firm World Steel Dynamics.
POSCO ranked as the world’s sixth-largest steelmaker by production volume in 2015 and has held the seventh spot through 2022 and 2023.
As part of its sustainability efforts, POSCO recently achieved a significant milestone by localizing the manufacturing technology for electrode rods, a crucial component in electric furnace operations.
These furnaces, which generate significantly lower carbon emissions than traditional blast furnaces, represent a key part of the company’s strategy to reduce its environmental footprint.
However, POSCO — operating under its holding company, POSCO Holdings — faces mounting global challenges.
The downturn in the electric vehicle market and disruptions in international trade have intensified pressures, exacerbated by U.S. President Donald Trump’s decision to impose a 25 percent tariff on imported steel and aluminum.
A POSCO Holdings official told AJP that the company is closely monitoring the situation and will actively support government-led negotiations on the tariff.
“We are maintaining vigilant oversight of the situation and will strengthen our efforts to pioneer the market through quality competitiveness, particularly in products that are challenging to manufacture in the United States,” the official said.
Legacy of Growth
POSCO was established on April 1, 1968, as part of South Korea’s drive for steel self-sufficiency, with Park Tae-joon serving as its first president.
With substantial financial backing from the United States and Japan, the company reached its first milestone by producing its inaugural batch of molten iron in 1973. By the following year, POSCO had surpassed $100 million in steel exports.
In 2022, the company underwent a strategic restructuring, creating POSCO Holdings as a parent entity focused on green energy materials, including lithium, nickel, hydrogen, and secondary battery components. Its steel-producing subsidiary, POSCO, remains Korea’s leading steel manufacturer.
POSCO Holdings reported a 38.5 percent decline in annual operating profit for 2024, falling to 2.17 trillion won, reflecting the impact of a global steel market downturn and weakened demand in the electric vehicle sector. Sales declined by 5.8 percent to 72.69 trillion won, while net profit dropped 48.6 percent to 948 billion won.
POSCO’s core steel business saw a 29.3 percent decline in operating profit, while its battery materials subsidiary, POSCO Future M, reported a sharp drop in operating profit to 1 billion won from 36 billion won year-over-year, affected by falling lithium and nickel prices as well as a U.S. Foreign Entity of Concern designation deferral.
Beyond U.S. tariffs, POSCO faces additional pressure from an influx of low-cost Chinese steel flooding the market. Among the world’s top 10 steelmakers by volume, five are Chinese, including the industry’s largest producer.
According to the Korea International Trade Association, South Korea’s steel imports from China surged 55.5 percent, from $6.67 billion in 2020 to $10.37 billion in 2024. In response, the South Korean government is considering anti-dumping measures to protect domestic manufacturers.
While regional rival Nippon Steel is advancing its bid to acquire U.S. Steel, potentially strengthening its foothold in the American market, POSCO remains focused on navigating its own challenges.
Analysts suggest that despite the U.S. tariff, Korean steelmakers may still find opportunities, as they are no longer constrained by the quota system that previously limited exports.
POSCO Holdings and POSCO Group Chairman Chang In-hwa addressed these challenges in his New Year’s address on Jan. 2, warning that the company’s steel, battery materials, and engineering divisions face existential threats.
Chang underscored the necessity of turning adversity into opportunity, emphasizing "absolute technological superiority" as the company’s cornerstone for maintaining competitiveness.
Despite the current economic downturn, the steel giant remains committed to industry leadership, pledging to set new standards for environmental, social, and governance (ESG) practices in the sector.
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