POSCO Expands at Gwangyang with 'Two-Track' Strategy: Low-Carbon Steel and Rare Gas Production

POSCO's Gwangyang Steelworks, historically a large-scale production base centered on blast furnaces, is undergoing a significant transformation. The facility is expanding its scope to become a cluster for advanced materials, integrating low-carbon steel production with the manufacturing of critical components for the semiconductor and aerospace industries.

The company announced on June 17 the commercial operation of a new electric arc furnace (EAF) at the Gwangyang plant. This facility, representing the largest single investment in an EAF in South Korea at approximately 600 billion won ($540 million), has an annual capacity of 2.5 million tons. The introduction of the EAF is a key strategy for reducing carbon emissions, as it utilizes recycled steel scrap, emitting up to 75% less carbon dioxide compared to the traditional blast furnace method, which relies on iron ore and coke.

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The new electric furnace will play a key role in strengthening our portfolio of low-carbon products until the commercialization of hydrogen reduction steelmaking (HyREX).

While the EAF significantly cuts carbon emissions, its actual impact on POSCO's overall carbon footprint depends on the utilization rate of the new furnace and the extent to which it replaces output from existing blast furnaces. The company aims to enhance its portfolio of low-carbon products using the EAF until hydrogen reduction steelmaking (HyREX) technology becomes commercially viable. POSCO is also focusing on producing high-quality steel grades, which can be challenging with EAFs due to variations in scrap metal content. They plan to achieve mass production of automotive and electrical steel sheets using EAFs by 2030, employing advanced refining techniques.

In parallel with the steel production expansion, POSCO Group's industrial gas specialist, POSCO Air Solution, inaugurated a high-purity rare gas production plant near the Gwangyang Steelworks. This facility will refine raw gases extracted from the steelworks' oxygen plant to produce xenon, krypton, and neon. These rare gases are essential materials for semiconductor manufacturing processes, such as photolithography and etching, as well as for aerospace and medical applications. The plant has an annual production capacity of 130,000 normal cubic meters, enabling it to supply approximately 52% of the domestic demand for these critical gases in the South Korean semiconductor market.

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We have established a domestic supply base for key materials used in semiconductors and aerospace, which have a high reliance on imports. We plan to expand our portfolio into various specialty gas businesses linked to the steel business.