POSCO Holdings Inc. is exploring the sale of its only steel plant in China after the facility posted steep losses, marking a potential retreat from what was once celebrated as a model Korean-Chinese partnership.
The Korean steelmaker has begun seeking advisers for the potential divestment of POSCO Zhangjiagang Stainless Steel, a facility that accounts for 1.1 million tons of annual crude steel capacity. The unit recorded an operating loss of 180 billion won ($130 million) last year, making it the biggest money-losing operation among POSCO’s overseas subsidiaries.
The plant, established in 1997 in Jiangsu Province, is 82.5% owned by POSCO entities, with China’s Shagang Group holding the remainder. Its struggles reflect broader challenges in China’s stainless steel sector, where production capacity of 28.21 million tons from 43 producers exceeds domestic consumption of 24.17 million tons.
The review is part of Chairman Jang In-hwa’s broader strategy to restructure 125 underperforming businesses by 2030. POSCO has already completed 21 such deals, raising 652.4 billion won. A company representative said they’re considering various options, including bringing in new investors.
