POSCO Group is pulling out of China after nearly three decades as South Korea’s largest steelmaker pivots toward the US and India markets, industry sources said Sunday.
The company plans to sell its Zhangjiagang Pohang Stainless Steel mill, its sole Chinese production facility established in 1997, as part of a broader strategy to shed underperforming assets. The plant operated at just 69.8% capacity last year, posting an operating deficit of 129.9 billion won ($89.5 million) as local Chinese manufacturers flooded the market with competing products.
Chairman Jang In-hwa is championing a “local complete investment” approach, focusing on establishing end-to-end production capabilities in high-demand markets rather than exporting finished goods.
The strategy shift comes partly in response to trade barriers, including the 25% steel tariff imposed by the Trump administration in 2018, which constrained POSCO’s US exports despite negotiated exemptions.
POSCO raised 662.5 billion won last year by divesting non-core assets, including its Papua New Guinea heavy oil power corporation and Nippon Steel shares. The company aims to generate an additional 2.7 trillion won through further sales to fund its international expansion.
The steelmaker is pursuing a joint venture with India’s JSW Steel while also considering investment in Hyundai Steel’s Louisiana facility and potential capacity expansion in Indonesia.
