POSCO projects 5% drop in 2022 crude steel output

South Korea's POSCO projected its crude steel production at 36.5 million mt in 2022, down 4.7% from 2021, the steelmaker said Jan. 28, as steel supply tightens amid global carbon emissions cuts.

POSCO said it expects domestic steel demand to rise 1.8% to about 57 million mt in 2022, with growth slowing in the second half of the year.

The company's crude steel output and product sales rose 6.5% and 4.0%, respectively, year on year in 2021, due to strong demand, particularly for cold-rolled/coated steel products.

Net profit at the company's parent POSCO Group surged more than 5.3 times to Won 5.18 trillion ($4.28 billion) in 2021, from Won 966 billion in 2020, helped by higher product prices in the second half of 2021.

The steelmaker said it plans to increase its share of domestic steel imports to 61% in 2022, from 59% in 2021.

The company will conduct feasibility studies to set up eco-friendly plants overseas. It signed a memorandum of understanding with India's Adani Group Jan. 13 to examine the construction of a "green" integrated steel mill at Mundra, Gujarat at a cost of about $5 billion.

POSCO's shareholders Jan. 28 approved a plan to spin off its steel business into a separate unlisted entity March 1, 2022, that will be owned by a new holding company, tentatively called POSCO Holdings.

The holding company will focus on "green" businesses for future growth, research and development, and investment, leaving the steelmaker to focus on its core business.

POSCO said it plans to diversify its sources of ferrous scrap by securing volumes through long-term overseas contracts. The company said it will also source eco-friendly iron -- hot-briquetted iron.

The company signed an MOU with US metal recycler Schnitzer Steel in the last quarter of 2021 to source ferrous scrap of 400,000 mt/year.

POSCO said it plans to raise its crude steel production capacity to 68 million mt/year in 2030, from about 46 million mt/year in 2021.

The company will add 2 million mt/year of production capacity in the fourth quarter of 2022, 300,000 mt/year over the third quarter of 2023 in the US, and another 300,000 mt/year in the first quarter of 2024 in the European Union.

POSCO said its new 900,000 mt/year joint venture automotive steel sheet plant at Tangshan, Hebei province, will be completed as early as the first quarter of 2023.