South Korea’s POSCO Holdings completed the sale of its Chinese stainless steel joint venture to Tsingshan Holdings Group for 400 billion won ($300 million), marking the steelmaker’s retreat from a market battered by oversupply and fierce competition.
The transaction transfers POSCO’s 82.5% stake in Zhangjiagang Pohang Stainless Steel to China’s largest stainless steel producer, according to industry sources. Tsingshan’s management team will take control of the facility on July 9.
PZSS, once dubbed “little POSCO” for its integrated production capabilities, has hemorrhaged money in recent years as Chinese competitors flooded the market. The facility’s operating losses more than doubled to 170 billion won in 2023 from 77.3 billion won in 2022.
The divestment forms part of Chairman Chang In-hwa’s plan to shed 125 unprofitable assets by 2030, with proceeds earmarked for new facilities in the United States, India and Indonesia. The sale represents the latest in POSCO’s pivot toward high-end steel products and battery materials as the company battles a supply glut driven by aggressive Chinese production.
Tsingshan, which produces over 16 million tons of stainless steel annually, has itself been cutting output at Indonesian plants due to weak demand. The acquisition consolidates the Chinese giant’s grip on a market where 43 domestic producers’ combined capacity exceeds consumption by 4 million tons.
