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South Korea's POSCO to focus on 'greening' steel business after spin-off
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Aims for hydrogen ironmaking demonstration plant in 2028
More than quadruple overseas steel production capacity
Ponders green steel mill in India
South Korea’s POSCO plans to focus on expanding and “greening” its steel business after it is spun off into a separate unlisted entity on March 1, 2022 that will be 100% owned by a new holding company, the steelmaker said in a recent presentation to investors.
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The move will facilitate the steelmaker’s plan to raise its crude steel production capacity by almost 48% to 68 million mt/year in 2030 from 46 million mt/year in 2021 while furthering its “green” goals that would lower its annual carbon dioxide emissions to 71 million mt from 79 million mt over the same nine-year period, the company said.
POSCO has recently given priority to new business such as hydrogen and batteries under “a steel-centered management system,” the company said in a statement Dec. 10 when its board approved the spin-off plan.
“From now on, the steel subsidiary will put aside its role as the group’s management and focus on their own innovative task of eco-friendly steel manufacturing,” POSCO said in the statement. Shareholders are expected to vote electronically on the plan by Jan. 28, 2022.
As part of the expansion, two new electric arc furnaces will be built in 2025 and 2027, respectively, while research and development of hydrogen-based ironmaking is expected to result in the construction of a demonstration plant by 2028 that is projected to have a capacity of 1 million mt/year, requiring 100,000 mt/year of hydrogen.
POSCO also aims to more than quadruple its overseas crude steel production capacity in nine years to 23.1 million mt/year from 5.1 million mt/year in 2021.
To support its expansion, the steelmaker will set up a base to increase its scrap purchases and take stakes in such overseas scrap suppliers, targeting about 4 million mt/year of scrap.
Overseas ventures
It will also invest in overseas hot briquetted iron plants, which includes investing in a HBI joint venture with Australian miners with about 2 million mt/year of HBI. POSCO is working with iron ore supplier Roy Hill to research hydrogen production and develop hydrogen-based steelmaking processes. It also has a similar arrangement with Rio Tinto.
POSCO’s aim to use green hydrogen to replace coal, estimating a need for 3.7 million mt/year of the gas. It plans also to become a major producer and supplier of hydrogen, making 5 million mt of green hydrogen by 2050.
Without disclosing details, POSCO said it aims to build an integrated steel mill in India using eco-friendly infrastructure such as renewable energy and hydrogen, likely through its local subsidiary POSCO Maharashtra Steel, which has 1.8 million mt/year of cold-rolled steel sheet production and 450,000 mt/year of hot-dip galvanized steel capacity.
It will eventually increase its production in Indonesia to about 10 million mt/year via Krakatau Posco, a 70:30 joint venture with POSCO the majority stakeholder. The Indonesia JV operates an integrated steel mill at Cilegon in Banten province with a production capacity of 3 million mt/year. The JV plans to increase production to 6 million mt/year under a phase two project.
POSCO has also formed a 50:50 JV with China’s HBIS Group to build a 900,000 mt/year plant at Tangshan in Hebei province. Construction will begin in January 2022 and completion is scheduled by the end of 2023.
In the US, POSCO plans to form a partnership for an integrated electric arc furnace, aiming for partners with a lead in low-carbon materials and the US steel market. 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.
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