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To raise overseas crude steel output to 23.1 mil mt/year by 2030
India, Indonesia and the US seen as growth areas
South Korean steelmaker POSCO aims to spend Won 12 trillion ($9.95 billion) to boost its overseas crude steel production capacity to 23.1 million mt/year by 2030, a nearly fivefold spike from 5.1 million mt/year in 2021, the company said March 2.
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It named India, Indonesia and the US as growth areas, having determined “that the competitiveness of green hydrogen production would be high in the future, it established a strategy to enter the (Indian) market considering the use of hydrogen…,” it said. India aims to manufacture 5 million mt/year of green hydrogen by 2030, its Ministry of Power said Feb. 17.
To that end, in mid-January, POSCO and India’s Adani Group signed a memorandum of understanding that could lead to the setting up of a “green” integrated steel mill at Mundra, Gujarat, at the cost of about $5 billion.
Also, it plans to eventually expand its integrated steel mill at Indonesia, boosting production to about 10 million mt/year via Krakatau Posco, a 70:30 joint venture with POSCO as the majority stakeholder. The JV operates the mill at Cilegon in Banten province, which has a production capacity of 3 million mt/year. The JV plans to increase production to 6 million mt/year under a phase two project.
The Indonesian output hike is timely as Indonesia prepares for a huge rise in steel demand as the country plans to move its capital from Jakarta to East Kalimantan in 2024.
“The United States, which possesses an abundance of eco-friendly iron sources such as iron scrap, is also emerging as a new growth market leading green steel, so it is considering an integrated electric furnace joint venture in the United States in the future,” POSCO said.
As a result, POSCO aims to set up a partnership for the envisaged EAF. It also has plans to build an EAF with 1.5 million mt/year of crude steel production capacity in neighboring Mexico through a joint venture via its Posco Mexico subsidiary.
Also, it signed an MOU with US metal recycler Schnitzer Steel in the last quarter of 2021 to source 400,000 mt/year of ferrous scrap.
The target came as POSCO Group switched to a holding company system and established POSCO Holdings on March 2, with the steel business split off as POSCO, focusing on its “transition to an eco-friendly production system such as hydrogen-reduced steel and CCUS (carbon capture, utilization and storage technology) technology,” the company said. POSCO is now wholly owned by POSCO Holdings.
To support its plans to “green” its business, POSCO will invest Won 2 trillion ($1.66 billion) “to build a carbon-neutral production system with the goal of reducing total CO2 emissions by 20%, including 10% social reduction, by 2030,” it said.
Part of that move includes developing hydrogen-reduced iron and steel so POSCO plans to build a demonstration plant using its proprietary hydrogen-reduced steel model HyREX and ascertain its commercial feasibility through a national project by 2030.
Overall, POSCO plans to raise its global crude steel production capacity to 68 million mt/year in 2030 from about 46 million mt/year in 2021.
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