POSCO to quadruple steel sheet production for eco-friendly cars

South Korean steelmaking giant POSCO Co. is slated to quadruple its production of non-grain-oriented electrical steel sheet, a key material in the traction motors of eco-friendly cars.

In a regular board meeting on Nov. 5, the company decided to invest 1 trillion won ($848.6 million) from 2022 to build factories to produce 300,000 tons of steel sheets per year. 

Adding to the current production of 100,000 tons, POSCO will be able to produce a total of 400,000 tons of steel sheets per year once the factory construction is completed in 2025. The annual production volume is enough for 8 million electric cars, given that 50 kilograms of non-grain-oriented electrical steel sheets are needed for each electric car. 

The new factory in POSCO’s steel plant in Gwangyang, about 420 kilometers southwest of Seoul, will manufacture the sheets with a wider width than before, as well as high-efficiency products with a thickness of 0.3 millimeters or less and various types of coating. “This will reduce 840,000 tons of greenhouse emissions by enhancing eco-friendly cars’ efficiency,” a POSCO official said.

Electrical steel sheet is widely applied in manufacturing for efficient magnetism and electricity conversion. While grain-oriented electrical steel sheet is mainly used for energy-efficient transformers, non-grain-oriented material is used for motors and power generators. Non-grain-oriented electrical steel sheet for traction motors has more than 30% higher energy efficiency for vehicles than other electrical steel sheets do. 

The Korean steelmaker has been active in developing eco-friendly car-related materials. In September, the company completed a 1-million-ton production facility for giga steel, ultrahigh-tensile-strength steel strong enough to endure the pressure of 100 kilograms per square millimeter, which enhances cars' energy efficiency. POSCO has produced the material since 2017 while so far investing 500 billion won in its production.

Meanwhile, the company is rebounding even stronger from the pandemic-induced economic slowdown, with an all-time high quarterly profit on robust demand from automakers, shipbuilders and construction firms.

POSCO’s operating profit for the third quarter rose to a record 3.11 trillion won on a consolidated basis, a nearly fivefold increase from 670 billion won a year earlier. The consolidated profit includes the results of its affiliates such as POSCO International, POSCO Chemical and POSCO Energy. Third-quarter sales increased 45% to a record 20.61 trillion won, the company said in a regulatory filing in October. 

Write to Jung-hwan Hwang at jung@hankyung.com
Jihyun Kim edited this article.