POSCO posts 6% annual fall in crude steel output for 2020 due to demand slowdown

Steel wire rods ready to be loaded onto a ship at the port

South Korea’s POSCO produced about 35.93 million mt crude steel in 2020, down 5.5% from 38.01 million mt in 2019, the steelmaker said Jan. 28.

POSCO attributed the lower production to steps to cope with a slowdown in demand resulting from the pandemic, and a revamp of its No. 3 blast furnace at Gwangyang that restarted on July 10, 2020, after completing scheduled works that lasted 20 months.

The revamp raised the furnace’s volume to 5,500 cu m from 4,600 cu m and output by 25% to 4.6 million mt/year.

The furnace is expected to boost POSCO’s crude steel production in 2021 as it will be the first time it will be running for a full year.

“Sales of automotive, billet, and slab products slow[ed] due to decreased global demand, but partially made up through increased sales of steel raw materials to China and expansion of (the) E-sales platform,” its parent, POSCO International, said the same day. About 380,000 mt of steel were sold through the platform, known as Steel Trade, in 2020. The platform was launched in November 2019.

Along with an expected recovery in global demand in 2021 due to the development of COVID-19 vaccines, POSCO expects crude steel production to rise to 37.80 million mt this year.

The steelmaker plans to boost efficiency by upgrading its high-grade steel production capacity and expanding into smart factories.

For instance, POSCO and Tata Steel Europe will develop new steel grades and tube technologies for hyperloops, which are tubes large enough to carry passenger or freight pods at more than 1,000 km/hour while using very little energy.

POSCO also plans to produce 5 million mt of green hydrogen by 2050 to reduce its dependency on fossil fuels and move to renewable energy sources as it works to decarbonize its steelmaking by 2050 by using green hydrogen to replace coal.

South Korean steelmakers manufactured 67.12 million mt of crude steel in 2020, down from 71.42 million mt the year before, data from the World Steel Association showed.

— Clement Choo, Samuel Chin