POSCO Holdings Inc. PKX is accelerating its transition toward low-carbon steelmaking with the completion of South Korea’s largest electric arc furnace (EAF) at its Gwangyang Steelworks. The newly completed facility represents a major milestone in the company’s decarbonization strategy and its long-term goal of achieving carbon neutrality by 2050.
The new EAF has an annual production capacity of 2.5 million tons of steel and was built with an investment of approximately KRW 600 billion (roughly $397 million). Construction began in February 2024 and took more than two years to complete. The facility will now serve as a cornerstone of POSCO’s low-carbon steel production system.
Unlike traditional blast furnaces that depend on iron ore and coking coal, EAFs mainly use recycled steel scrap, reducing energy use and emissions. POSCO estimates the Gwangyang EAF can cut carbon emissions by up to 75% versus conventional steelmaking.
POSCO is going beyond scrap-based steelmaking by developing its proprietary “Haptang” (hot metal mixing) technology, which blends molten iron from blast furnaces with steel produced in electric arc furnaces. The process is designed to maintain the quality standards required for premium steel products while reducing carbon emissions. Through this hybrid approach, PKX aims to mass-produce high-value products, including automotive steel sheets and electrical steel, by 2030.
The EAF project forms part of POSCO’s broader decarbonization roadmap. The company views electric arc furnace technology as an important intermediate step toward its next-generation HyREX hydrogen-reduction steelmaking process, which is expected to play a central role in its long-term carbon-neutral production system. POSCO ultimately plans to transition from coal-based steelmaking toward hydrogen-based ironmaking and establish a fully decarbonized production structure by 2050.
Per POSCO, the completion of the Gwangyang EAF represents a key milestone in advancing low-carbon steel production and reflects POSCO’s commitment to a decarbonized manufacturing model. The company noted that the facility will help meet rising global demand for sustainable steel products while enhancing its competitive position in the transition to a low-carbon economy.
Shares of PKX have gained 8.5% in the past year against the industry’s 2.4% decline.
PKX Zacks Rank & Other Key Picks
PKX currently carries a Zacks Rank #2 (Buy).
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