POSCO Holdings Inc. operates as an integrated steel producer in Korea and internationally. The company also engages in businesses that complement its steel manufacturing operations and also carefully seeks out promising investment opportunities to diversify its businesses both vertically and horizontally.
Segments
The company operates through six segments: Steel, Trading, Construction, Logistics and Others, Green Materials and Energy, and Others.
Steel
This segment includes the production a...
POSCO Holdings Inc. operates as an integrated steel producer in Korea and internationally. The company also engages in businesses that complement its steel manufacturing operations and also carefully seeks out promising investment opportunities to diversify its businesses both vertically and horizontally.
Segments
The company operates through six segments: Steel, Trading, Construction, Logistics and Others, Green Materials and Energy, and Others.
Steel
This segment includes the production and sale of steel products.
Green Infrastructure Business: The company's Green Infrastructure Business includes its businesses related to provision of infrastructure and related services. Such segment is divided into three operations as follows:
Trading
The segment of the company's Green Infrastructure Business consists primarily of the global trading activities, natural resources development activities and power generation activities of POSCO International. POSCO International exports and imports a wide range of steel products that are both obtained from and supplied to POSCO, as well as steel and other products from and to other suppliers and purchasers in Korea and overseas. On January 1, 2023, POSCO Energy, Korea's largest domestic private power utility company and a provider of alternative environmentally-friendly energy solutions, merged into POSCO International.
Construction
This segment of the company's Green Infrastructure Business consists primarily of POSCO E&C's planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas.
Logistics and Others
The segment of the company's Green Infrastructure Business consists primarily of the information technology and operational technology services of POSCO DX and the integrated logistics services of POSCO FLOW.
Green Materials and Energy
This segment includes the manufacturing and sale of various energy-related and other industrial materials by POSCO Future M, including anode and cathode materials for rechargeable batteries and investments made by it in production projects relating to other materials, such as lithium.
Others
This segment includes POSCO HOLDINGS INC. and all other entities which fall below the reporting thresholds. POSCO HOLDINGS INC. actively explores diversification opportunities in promising business areas.
Steel
POSCO is the largest fully integrated steel producer in Korea, and one of the largest steel producers in the world, based on annual crude steel production. The company, through POSCO and its other steel-producing subsidiaries, produced approximately 39.9 million tons of crude steel and stainless steel in 2023, a significant majority of which was produced at Pohang Works and Gwangyang Works. As of December 31, 2023, the company had approximately 45.3 million tons of annual crude steel and stainless steel production capacity, including 40.7 million tons of production capacity in Korea. Pohang Works and Gwangyang Works are two of the most technologically-advanced integrated steel facilities in the world. The company manufactures and sells a diversified line of steel products, including cold rolled and hot rolled products, stainless steel products, plates, wire rods and silicon steel sheets, and it is able to meet a broad range of customer needs from manufacturing industries that consume steel, including automotive, shipbuilding, home appliance, engineering and machinery industries.
POSCO M-Tech Co., Ltd., which is also included in the Steel Segment, produces aluminum deoxidizers used to remove excess oxygen during the steel manufacturing process to improve durability of steel products, and it also provides integrated steel product packing solutions for steel production facilities.
Korea is the company's most important market. Domestic sales accounted for 39.6% of the Steel Segment's total revenue in 2023. POSCO's steel products constituted approximately 45.5% of the total sales volume of such steel products sold in Korea in 2023. The Steel Segment's export sales and overseas sales to customers abroad accounted for 60.4% of the Steel Segment's total revenue in 2023. The Steel Segment's major export market is Asia, with Asia other than China and Japan accounting for 24.6%, China accounting for 21.7% and Japan accounting for 10.6% of the Steel Segment's total steel export revenue in 2023.
Major Products
The company, through POSCO and its other steel-producing subsidiaries, manufacture and sell a broad line of steel products, including cold rolled products; hot rolled products; stainless steel products; plates; wire rods; and silicon steel sheets.
In addition to steel products produced by it and directly sold to external customers, the company engages its consolidated sales subsidiaries (including POSCO International) to sell its steel products produced by it. Sales of such steel products by the company's consolidated sales subsidiaries to external customers are recognized as external revenue of the Trading Segment of its Green Infrastructure Business.
Cold Rolled Products
Cold rolled coils and further refined galvanized cold rolled products are used mainly in the automotive industry to produce car body panels. Other users include the household goods, electrical appliances, engineering and metal goods industries.
The company's deliveries of cold rolled products produced by it and directly sold to external customers amounted to 9,780 thousand tons in 2023, representing 33.9% of its total sales volume of principal steel products produced by it and directly sold to external customers. Cold rolled products constitute the company's second largest product category in terms of sales volume and the largest product category in terms of revenue from steel products produced by it and directly sold to external customers. POSCO had a domestic market share for cold rolled products of approximately 58% in 2023.
Hot Rolled Products
Hot rolled coils and sheets have many different industrial applications. They are used to manufacture structural steel used in the construction of buildings, industrial pipes and tanks, and automobile chassis. Hot rolled coil is also manufactured in a wide range of widths and thicknesses as the feedstock for higher value-added products, such as cold rolled products and silicon steel sheets. The largest customers of the company's hot rolled products are downstream steelmakers in Korea which use the products to manufacture pipes and cold rolled products.
The company's deliveries of hot rolled products produced by it and directly sold to external customers amounted to 9,784 thousand tons in 2023, representing 33.9% of its total sales volume of principal steel products produced by it and directly sold to external customers. Hot rolled products constitute the company's largest product category in terms of sales volume and second largest product category in terms of revenue from steel products produced by it and directly sold to external customers. POSCO had a domestic market share for hot rolled products of approximately 52% in 2023.
Stainless Steel Products
Stainless steel products are used to manufacture household goods and are also used by the chemical industry, paper mills, the aviation industry, the automotive industry, the construction industry and the food processing industry.
The company's deliveries of stainless steel products produced by it and directly sold to external customers amounted to 2,459 thousand tons in 2023, representing 8.5% of its total sales volume of principal steel products produced by it and directly sold to external customers. Stainless steel products constitute the company's third largest product category in terms of revenue from steel products produced by it and directly sold to external customers. Although sales of stainless steel products accounted for only 8.5% of total sales volume of the principal steel products produced by the company and directly sold to external customers in 2023, they represented 19.4% of its total revenue from such steel products in 2023. POSCO had a domestic market share for stainless steel products of approximately 46% in 2023.
Plates
Plates are used in shipbuilding, structural steelwork, offshore oil and gas production, power generation, mining, and the manufacture of earth-moving and mechanical handling equipment, boiler and pressure vessels and other industrial machinery. The Korean shipbuilding industry, which uses plates to manufacture chemical tankers, rigs, bulk carriers and containers, and the construction industry are the company's largest customers of plates.
The company's deliveries of plates produced by it and directly sold to external customers amounted to 4,667 thousand tons in 2023, representing 16.2% of its total sales volume of principal steel products produced by it and directly sold to external customers. POSCO had a domestic market share for plates of approximately 41% in 2023.
Wire Rods
Wire rods are used mainly by manufacturers of wire, fasteners, nails, bolts, nuts and welding rods. Wire rods are also used in the manufacture of coil springs, tension bars and tire cords in the automotive industry. The largest customers for the company's wire rods are manufacturers of wire ropes and fasteners.
The company's deliveries of wire rods produced by it and directly sold to external customers amounted to 1,623 thousand tons in 2023, representing 5.6% of its total sales volume of principal steel products produced by it and directly sold to external customers. POSCO had a domestic market share for wire rods of approximately 50% in 2023.
Silicon Steel Sheets
Silicon steel sheets are used mainly in the manufacture of power transformers and generators, rotating machines and electric motors. The company's deliveries of silicon steel sheets produced by it and directly sold to external customers amounted to 524 thousand tons in 2023, representing 1.8% of its total sales volume of principal steel products produced by it and directly sold to external customers. POSCO had a domestic market share for silicon steel sheets of approximately 75% in 2023.
Others
Other products include lower value-added semi-finished products, such as pig iron, billets, blooms and slab.
Markets
Korea is the company's most important market. Domestic sales represented 39.6% of the Steel Segment's total revenue in 2023. The Steel Segment's export sales and overseas sales to customers abroad represented 60.4% of the Steel Segment's total revenue in 2023. The company's sales strategy has been to devote its production primarily to satisfy domestic demand, while seeking export sales to utilize capacity to the fullest extent and to expand its international market presence.
Domestic Market
The company primarily sells in Korea higher value-added and other finished products to end-users and semi-finished products to other steel manufacturers for further processing. Local distribution companies and sales affiliates sell finished steel products to low-volume customers. The company provides service technicians for large customers and distributors in each important product area.
Exports
The Steel Segment's export sales and overseas sales to customers abroad represented 60.4% of the Steel Segment's total revenue in 2023, 56.8% of which was generated from exports sales and overseas sales to customers in Asian countries.
The company distributes its export products mostly through Korean trading companies, including POSCO International, and its overseas sales subsidiaries. The company's largest export market in 2023 was Asia (other than China and Japan), which accounted for 24.6% of its export revenue from steel products produced and sold by it. The principal products exported to Asia (other than China and Japan) were cold rolled products, including continuous galvanized products.
The company's second largest export market in 2023 was China, which accounted for 21.7% of its export revenue from steel products produced and sold by it. The principal products exported to China were cold rolled products, including continuous galvanized products.
Anti-Dumping, Safeguard and Countervailing Duty Proceedings
From time to time, the company's exporting activities have become subject to anti-dumping, safeguard and countervailing proceedings. As a steel producer with global sales and operations, it is involved in trade remedy proceedings in markets worldwide, including in the United States. The company actively participates in such proceedings to minimize any adverse effects and associated risks. While there has been an increase in the number of trade cases in recent years, and an increased focus on trade issues by government officials, such cases have been limited in scope relative to its global sales and operations. The company continues to carefully monitor developments with respect to trade remedy policy in all markets in which it participates and, where necessary, vigorously defend its rights through litigation before tribunals, such as the U.S. Court of International Trade. The company's products that are subject to anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs in the aggregate have not had a material adverse impact on its business and operations in recent years.
Competition
The company faces competition from Hyundai Steel Co., Ltd. and from various foreign producers, primarily from China and Japan. In 2023, the company competes with Hyundai Steel Co., Ltd., smaller specialized domestic manufacturers and various foreign producers, primarily from China and Japan.
Green Infrastructure Business
Trading segment
The company's trading activities consist primarily of trading activities of POSCO International. POSCO International is a global trading company that primarily engages in trading of steel and raw materials, investing in energy and mineral development projects and operating power generation facilities. It also trades textiles, agricultural commodities and other goods. POSCO International's sales consist of third-country trading sales, export trading sales and domestic trading sales. On January 1, 2023, POSCO Energy, Korea's largest domestic private power utility company and a provider of alternative environmentally-friendly energy solutions, merged into POSCO International.
Trading Activities. POSCO International's trading activities consist of exporting and importing a wide variety of products and commodities, including iron and steel, raw materials for steel production, non-ferrous metals, chemicals, automotive parts, machinery and plant equipment, electronics products, agricultural commodities and textiles. The products are obtained from and supplied to numerous suppliers and purchasers in Korea and overseas, which are procured through a global trading network consists of overseas trading subsidiaries, branches and representative offices. Such subsidiaries and offices support POSCO International's trading activities by locating suitable local suppliers and purchasers on behalf of customers, identifying business opportunities and providing information regarding local market conditions.
In most cases, POSCO International enters into trading transactions after the underlying sale and purchase contracts have been matched, which mitigates inventory and price risks to POSCO International. POSCO International typically enters into trading transactions as a principal, and in limited cases as an import or export agent. In the instances in which it acts as an arranger for a third country transaction, POSCO International derives its gross trading profit from, and recognizes as sales, the commission paid to it by the customer.
In the case of trading transactions involving large-scale industrial or construction projects, POSCO International also provides necessary project planning and organizing services to its customers.
Natural Resources Development Activities: POSCO International also invests in energy and mineral development projects throughout the world. In particular, POSCO International holds a 51.0% interest in a gas field project in Myanmar, where production of gas commenced in July 2013. Natural resources development projects, while entailing higher risks than the traditional trading business, offer higher potential returns. POSCO International intends to continue to expand its operations by carefully seeking out promising energy development projects abroad.
Power Generation Activities: POSCO International acquired the power generation business of POSCO Energy through its merger into POSCO International on January 1, 2023. POSCO International operates power generation facilities in Korea and Southeast Asia, including LNG combined cycle power plants. As of December 31, 2023, POSCO International's total power generation capacity of its LNG combined cycle power plants was approximately 3,414 megawatts. As of such date, POSCO International's total power generation capacity of its renewable solar energy facilities was approximately 15 megawatts and its onshore wind power energy facilities was approximately 63 megawatts.
POSCO International also operates an LNG receiving terminal with an aggregate capacity to process approximately 6.0 million tons of LNG annually in Gwangyang as of December 31, 2023. In addition, POSCO International participates in LNG trading, LNG tank rental services and LNG ship trial operations in order to achieve maximum operational efficiency of its LNG terminal.
POSCO International also engages in fuel cell facility installation and operation services, as well as selectively seeks opportunities to expand into solar, wind and other renewable energy businesses in order to become an integrated provider of energy solutions.
Competition
POSCO International's power generation business competes principally with private-sector power generation companies in Korea that are affiliated with major domestic business groups, including SK E&S and GS EPS.
Construction segment
POSCO E&C is one of the leading engineering and construction companies in Korea, primarily engaged in the planning, design and construction of industrial plants and architectural works and civil engineering projects. In particular, POSCO E&C has established itself as one of the premier engineering and construction companies in Korea through its strong and stable customer base; and its cutting-edge technological expertise obtained from construction of advanced integrated steel plants, as well as participation in numerous modernization and rationalization projects at its Pohang Works and Gwangyang Works.
Leveraging its technical know-how and track record of building some of the leading industrial complexes in Korea, POSCO E&C has also focused on diversifying its operations into construction of high-end apartment complexes and participating in a wider range of architectural works and civil engineering projects, as well as engaging in urban planning and development projects and expanding its operations abroad.
POSCO E&C also has substantial experience in the energy field obtained from the construction of various power plants for member companies of the POSCO Group, specializing primarily in engineering and construction of LNG-fired thermal power plants. In response to increasing demand from the energy industry, POSCO E&C plans to continue to target opportunities in power plant construction, especially in Asia and Africa.
Logistics and Others segment
POSCO DX: POSCO DX provides a wide range of information technology and operational technology services. In particular, POSCO DX has expertise in providing services to address the evolving needs of manufacturing companies arising from the convergence of information technology and operational technology.
POSCO DX's information technology services primarily consist of buildout and management of information technology infrastructure, including manufacturing execution systems, supply chain management systems, and enterprise resource planning systems. POSCO DX also serves as a managed service provider for the operation of cloud data centers on behalf of its clients, and provides other smart technology services, including smart CCTV and smart home solutions.
POSCO DX's operational technology services primarily relate to automation of factory equipment and manufacturing processes and provision of energy efficiency solutions. POSCO DX also provides system engineering services targeting specific areas of operational processes, including automation of logistical operations and buildout and management of pollutant monitoring systems and intelligent transportation systems. In addition, POSCO DX has developed PosFrame, an information technology platform designed to enhance the overall operations of POSCO's steel works. PosFrame enables POSCO to implement its production quality management and other smart factory solutions for the member companies of the POSCO Group located in Korea and abroad.
POSCO FLOW: POSCO FLOW provides a wide range of integrated logistics services. It engages in the operation of central terminal systems for transportation, storage and processing of coal and other raw materials primarily used by power generation and cement companies in Korea and abroad. POSCO FLOW also offers optimized logistics solutions for a wide range of products including steel products, industrial parts, grains, natural gas and construction equipment and materials.
Competition: POSCO DX competes principally with system integration service providers in Korea that are affiliated with major domestic business groups, including Samsung SDS, LG CNS and SK Inc. C&C. POSCO FLOW competes principally with logistics service providers in Korea that are affiliated with major domestic business groups, including Hyundai Glovis, Samsung SDS and LX Pantos.
Green Materials and Energy segment
POSCO Future M
POSCO Future M manufactures anode and cathode materials, which are two of the main components of rechargeable batteries. POSCO Future M sells such materials primarily to Korea's leading electric vehicle battery manufacturers, such as LG Energy Solution, Samsung SDI and SK On, as well as to their joint ventures with global automotive manufacturers.
POSCO Future M also manufactures quicklime and refractories used in steel manufacturing processes and other industrial applications as well as a wide range of chemical products, such as coal tar and light oil. Quicklime is a widely used chemical component in a variety of industries. In the steel industry, a major use of quicklime is to remove impurities in the basic oxygen steelmaking process. Refractories are materials that are resistant to high temperature, used predominantly as furnace linings for elevated temperature materials processing and other applications in which thermomechanical properties are critical.
Competition: In the energy materials market, POSCO Future M competes with other global leading manufacturers of cathode and anode materials, including LG Chemical Co., Ltd. and Ecopro BM Co., Ltd. In its legacy business areas of refractories and lime chemicals, POSCO Future M competes principally with Chosun Refractories ENG Co., Ltd. and Korea Refractories Co, Ltd.
Investments in Lithium Hydroxide and Lithium Carbonate Production Projects
Through investments made by POSCO HOLDINGS INC., the company engages in natural resources development and production projects for lithium hydroxide and lithium carbonate, which are key materials for the production of cathode materials.
POSCO Argentina: In 2018, POSCO Argentina SAU (POSCO Argentina), a wholly owned subsidiary of POSCO HOLDINGS INC., acquired a salt lake located in Salta and Catamarca provinces of Argentina. In April 2024, POSCO Argentina completed stage one of its construction of a commercialization plant adjacent to the lake for the production of lithium hydroxide.
POSCO Pilbara Lithium Solution: In 2018, the company acquired a 2.74% stake in Pilbara Minerals Limited (Pilbara Minerals) and secured off-taking of spodumene mineral from the Pilgangoora Project, which is located 120 kilometers from Port Hedland in Western Australia's resource-rich Pilbara region. POSCO Pilbara Lithium Solution Co., Ltd., a joint venture with Pilbara Minerals in which POSCO HOLDINGS INC. holds a 82% interest, is constructing a commercialization plant in Yulchon industrial complex in Gwangyang for the production of lithium hydroxide.
Others segment
Others segment includes POSCO HOLDINGS INC. and all other entities which fall below the reporting thresholds. POSCO HOLDINGS INC. actively explores diversification opportunities in promising business areas. POSCO HOLDINGS INC. holds a 58.6% interest and POSCO-China holds a 23.9% interest.
Insurance
The company maintains property insurance for its property, plant and equipment that is to be consistent with market practice in Korea.
Government Regulations
Pursuant to the Monopoly Regulation and Fair Trade Act of Korea, the company, as a non-financial holding company, are required to maintain the shareholding ratio of its subsidiaries above a certain threshold (i.e., 20% in case of a public company and 40% in case of a private company) and is also required to maintain its liabilities-to-equity ratio below 200%. The company is also required to annually report to the Korea Fair Trade Commission whether it has complied with such restrictive requirements.
History
POSCO Holdings Inc. was founded in 1968. The company was incorporated in 1968 under the Commercial Code of the Republic of Korea.
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