POSCO Group to pivot focus to lithium and energy, reducing steel's dominance

POSCO Group, long synonymous with steel production, has officially announced a significant strategic pivot, aiming to transform into a global leader in lithium and energy resources. The company revealed its 'Triple Core' strategy at a CEO Investor Day event, outlining plans to invest 16.7 trillion won by 2028 to build a robust business structure encompassing steel, strategic resources like lithium and rare earth elements, and energy resources including LNG and renewables.

This move comes as POSCO faces headwinds in its core steel business, grappling with oversupply from China and trade tariffs from the U.S. In the first quarter, steel operating profit fell 23% year-on-year. Conversely, its energy sector, particularly LNG development, saw a 33% profit increase, and its secondary battery materials business, including lithium, significantly reduced its operating loss.

POSCO Group Chairman Choi Jeong-woo emphasized the need for bold innovation amidst global supply chain instability and the accelerating low-carbon transition. "Now is the time to create new growth opportunities through bold portfolio innovation," he stated, highlighting the ambition to lead in national industrial security and supply chain strengthening by expanding into resources beyond steel and materials.

The company projects substantial revenue growth, aiming for 187 trillion won by 2035, with a notable shift in revenue composition. Steel's share is expected to decrease from 51% to 35%, while resources and energy will increase from 3% to 14% and 13% to 21%, respectively. To achieve this, POSCO plans to establish a lithium production capacity of 173,000 tons annually by 2033, positioning itself among the top global lithium producers. The energy sector will focus on expanding LNG operations and venturing into offshore wind and solar power markets. Meanwhile, the steel business will bolster overseas production capacity to 10 million tons by 2031.

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Now is the time to create new growth opportunities through bold portfolio innovation. We will lead national industrial security and supply chain strengthening by expanding our business areas to resources beyond steel and materials.