POSCO Reassesses Titanium Business... Potential Changes to Korea’s Only Production System

Continued Pressure from Low-Priced Chinese Imports and Declining Profitability
Withdrawal from the Business Under Review; "No Decision Has Been Made Yet"

POSCO is conducting a comprehensive review of the competitiveness and profitability of its titanium business, raising the possibility of changes to the country's only titanium plate production system. Amid an influx of low-priced Chinese products, it is reportedly considering a range of options, including withdrawing from the business.

POSCO.

According to the steel industry on July 13, POSCO is reassessing the operational direction of its titanium business. Withdrawal from the business has been mentioned as one of the options under consideration, but the company maintains that nothing has been decided yet.

Titanium is a representative high value-added metal material with excellent corrosion resistance and light weight. Its resistance to corrosion makes it suitable for use in chemical plants, marine structures, and power generation facilities, as well as in various industries such as aerospace, defense, and medical devices. While the initial material cost is higher than that of ordinary steel, titanium is regarded as a material in steady industrial demand due to its long lifespan and cost-saving benefits for maintenance.

POSCO entered the titanium business in 2008 as part of its future growth strategy and succeeded in commercial production in 2010, establishing the foundation for domestic production of titanium plates. Since then, POSCO has expanded supplies mainly to the power, plant, and shipbuilding sectors, surpassing a cumulative sales volume of 10,000 tons in 2015. Currently, POSCO is the only company in Korea capable of producing titanium coils and plates through an integrated process from hot rolling to cold rolling.

However, the market environment has changed significantly following the expansion of supply from Chinese companies. Low-priced products, backed by large-scale production capacity, have entered the domestic market, intensifying price competition. Given the relatively small market size of the titanium business, it has become increasingly difficult to secure profitability.

Industry sources estimate that POSCO’s titanium production volume has declined to about one-third of its previous levels. The combination of rising costs, weakening demand, and aggressive competition from low-priced Chinese imports has greatly weakened the business’s competitiveness.

Market prices also continue to be weak. According to Trading Economics, as of July 10, the price of titanium was 46.5 yuan per kilogram, down 4.12% from a month earlier and 7.92% lower than the same period last year.

Since POSCO is the only company in Korea capable of integrated titanium plate production, its future decisions are expected to impact the domestic supply chain as well.

A POSCO official stated, "We are constantly reviewing a variety of strategic options to enhance business competitiveness and optimize our portfolio. Various operational improvement measures for the titanium business are also under consideration, but nothing has been finalized yet."

This content was produced with the assistance of AI translation services.