POSCO Electric Arc Furnace Launch to Reduce Emissions

POSCO Electric Arc Furnace Launch Set for June 2026 at Gwangyang Plant

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POSCO Electric Arc Furnace Launch Signals Shift Toward Efficient Steelmaking

The POSCO electric arc furnace launch marks a major step in the company’s steelmaking transition. The new facility will start operations in June 2026.

POSCO is building the new unit at its plant in Gwangyang. The electric arc furnace will produce 2.5 million tons of steel annually.

Construction began in 2024 and concluded in 2025. The project supports the company’s strategy to improve energy efficiency and modernize production.

Additionally, the new furnace strengthens POSCO’s ability to integrate scrap-based steelmaking. As a result, the company advances its transition toward lower-carbon steel technologies.

Technology Investments Support POSCO Electric Arc Furnace Launch

The POSCO electric arc furnace launch relies on advanced melting and scrap handling systems. The company ordered key technologies from Italian engineering firm Tenova.

Tenova will supply the Consteel continuous scrap feeding system. The system improves melting efficiency and stabilizes furnace operations.

POSCO will also use the Consterrer electromagnetic stirring system. This technology enhances molten steel quality during production.

Scrap Management Expansion at Gwangyang

POSCO also expands scrap infrastructure to support the new furnace. The company is upgrading the scrap yard at the Gwangyang plant.

Storage capacity will increase from 110,000 tons to 160,000 tons. This expansion will improve raw material handling and logistics.

Initially, POSCO plans to rely mainly on internal scrap generated at the facility. However, the company expects scrap purchases to reach about two million tons in 2026.

Strategic Portfolio Moves Accompany Steel Transition

POSCO continues to reshape its broader business portfolio. The company recently sold its remaining stake in Nippon Steel.

The transaction could generate more than 200 billion won in additional cash. The move aligns with POSCO’s strategy to focus on growth sectors.

Meanwhile, POSCO increases investments in battery materials and hydrogen technologies. These sectors support the global transition toward cleaner industrial systems.

Despite these efforts, green steel demand is still developing slowly. Consequently, scrap consumption growth may remain moderate in the near term.

SuperMetalPrice Commentary:
The POSCO electric arc furnace launch reflects a broader global steel industry shift. Steelmakers increasingly invest in EAF technology to cut emissions and improve efficiency. However, scrap supply and green steel demand will shape the pace of this transition. In Asia, POSCO’s move could accelerate regional competition in low-carbon steel production.

One response

Michael Davis
POSCO is finally going in earnest toward expanding electricity. In the past, it was centered on blast furnaces, but times have changed a lot. There are environmental regulations and energy efficiency issues, so this trend seems to be faster in the future.
However, in order to expand to electricity, supply and demand of scrap is the key, and I’m a little worried about whether the domestic scrap market will follow stably. It starts with internal scrap, but if it’s 2 million tons per year, you’ll need a lot of external procurement.
Still, 2.5 million tons in Gwangyang is a considerable investment, and I think it’s a choice to secure competitiveness in the long run. POSCO seems to have taken the right direction because the steel industry is in an era where both carbon and energy issues must be considered. We have to see how the results will be after the actual operation.
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