Steel pays, lithium still has to prove itself
- Steel is still the center of the company, with 2024 external segment revenue of Won 39,104 billion.
- Battery materials are the growth bet, but 2024 external revenue fell 26.3% as EV demand slowed.
- Management targets 50,000 tons of lithium sales this year, split between Pilbara and Argentina.
- Argentina Phase 1 was delayed by membrane part supply issues, with full operation pushed to July to August 2026.
- The Hyundai US steel plant plan is a direct answer to 2027 USMCA origin rules.
Old steel, new borders
POSCO Holdings is trying to solve two problems at once. The first is steel. Trade rules are getting tougher, so the company wants more local production in key markets. The Hyundai Motor Group plan for a US electric arc furnace, or EAF, is meant to meet the USMCA rule that steel must be melted and poured in the region starting in July 2027.
The second problem is growth. POSCO wants rechargeable battery materials to become its second growth engine. That includes lithium, cathode materials, anode materials, and nickel-linked projects. Management says it plans to sell 50,000 tons of lithium this year, which would be twice last year's volume.
The bear case is not gone. Argentina Phase 1 brine lithium hit supply issues for membrane parts, so full operation slipped to July to August 2026. The hard rock lithium business also has a margin squeeze because spodumene input costs rose faster than lithium hydroxide prices. Management said the spodumene to lithium hydroxide price ratio reached 11%.
This is a company in a hard middle stage. Steel pays the bills, but steel prices and imports remain weak. Battery materials could change the story, but only if POSCO can ramp Argentina, protect margins at Pilbara Lithium Solutions, and avoid building too much capacity before EV demand recovers.
How POSCO makes money
POSCO makes most of its money by producing and selling steel, then moving steel and other goods through trading and infrastructure units. Steel earnings depend on the spread between selling prices and raw material costs like iron ore and coal. In 2024, the company said its average steel unit price fell 4.3%, even though sales volume rose 1.1%.
Infrastructure adds trading, construction, logistics, power, and natural resources work. This makes POSCO more than a steel mill, but it also ties the company to global trade, construction cycles, currency moves, and energy prices.
Battery materials are the big reinvestment area. POSCO Future M sells cathode and anode materials. POSCO Argentina and Pilbara-related projects are meant to secure lithium supply. The logic is simple: if automakers need secure battery supply chains, POSCO wants to own more of the raw material and processing chain.
Where it breaks is timing. Building mines, brine projects, and chemical plants costs money before they earn steady cash. If lithium prices stay low, if spodumene costs stay high, or if EV demand stays soft, the battery materials plan can hurt profits instead of helping them.
What POSCO sells
Steel products
POSCO sells hot rolled, cold rolled, plate, stainless, wire rod, and silicon steel products. This is still the core profit engine, but prices are under pressure.
Automotive steel
Automotive steel links POSCO to carmakers like Hyundai. The planned US EAF is meant to protect this supply chain under stricter North American rules.
Lithium hydroxide
Lithium hydroxide is used in EV batteries. POSCO is ramping Pilbara and Argentina supply, with management targeting 50,000 tons of lithium sales this year.
Cathode materials
POSCO Future M makes cathode materials, including high nickel cathodes. Q1 2025 showed a profit turnaround, helped by a 64% quarter over quarter rise in high nickel cathode sales volume.
Anode materials
POSCO sells artificial and natural graphite anode materials. The line is tied to EV battery demand and was part of the 2024 battery materials slowdown.
Green steel technology
HyREX is POSCO's hydrogen-based steelmaking effort. It is an option on lower-carbon steel, but it is not yet the main profit driver.
Infrastructure and energy
POSCO International, POSCO E&C, POSCO DX, and related units handle trading, construction, logistics, power, and natural gas. These businesses add scale but can swing with trade and construction cycles.
2024 revenue mix
The mix uses 2024 external segment revenue from POSCO's Form 20-F, before consolidation and basis difference adjustments. Steel and infrastructure still dominate the company.
What could go wrong
Lithium ramp slips again
High impact · Medium oddsArgentina Phase 1 already faced a 2 to 3 month delay because key membrane parts had supply issues. Management expects full operation in July to August 2026. Another delay would hurt the 50,000 ton lithium sales target and weaken trust in the battery materials plan.
Spodumene costs eat lithium margins
High impact · High oddsThe hard rock lithium business is seeing input costs rise faster than lithium hydroxide prices. Management said the spodumene to lithium hydroxide price ratio reached 11%. Higher lithium prices may not help if raw material costs rise first.
US localization costs more than expected
Medium impact · Medium oddsThe USMCA melted and poured rule starts in July 2027 and pushes POSCO toward local US steelmaking with Hyundai. This can protect auto steel demand, but an EAF plant needs capital and execution. A poor equity structure or cost overrun could dilute the benefit.
Cheap Asian steel keeps prices weak
High impact · High oddsPOSCO has already said cheap imports in East and Southeast Asia hurt operations. In 2024, average steel unit prices fell 4.3% from 2023, and operating profit margin fell to 2.0%. If imports keep pressure on prices, steel may not generate enough cash to fund the growth plan comfortably.
EV demand stays in the chasm
High impact · Medium oddsBattery materials external revenue fell 26.3% in 2024. POSCO has postponed Argentina Plant 4 completion to Q1 2026 because lithium prices and demand stayed weak. If automakers slow orders again, cathode, anode, and lithium assets may stay underused.
In one breath
Is POSCO Holdings mainly a steel company or a battery company?
It is still mainly a steel and infrastructure company. Battery materials are the growth plan, but the 2024 revenue mix shows steel and trading are much larger today.
Why is POSCO building steel capacity in the United States?
North American trade rules are getting stricter. The July 2027 USMCA melted and poured rule means some auto steel needs to be made in the region, so POSCO is working with Hyundai on a US EAF plant.
What is the key lithium risk for POSCO?
The key risk is execution and margin spread. Argentina Phase 1 must ramp after membrane part delays, and Pilbara Lithium Solutions needs lithium hydroxide prices to recover faster than spodumene costs.
Why did POSCO's 2024 profit fall so much?
Revenue fell 4.7% in 2024, and profit fell 45.6%. Steel prices were weak, battery materials demand slowed, and the company recorded pressure from impairments and weaker segment profit.