POSCO Group produces the core steel materials required to drive the global shift toward decarbonization. Through high-performance steel products and tailored solutions, the Group enhances safety, efficiency, and durability across industries including oil and gas, power generation, and renewable energy, contributing to the sustainable growth of the global energy sector. Here, we take a closer look at POSCO Group’s key steel products that are shaping the future of energy infrastructure.

Powering the Energy Transition with POSCO Group’s High-Performance Steel

The global energy landscape is undergoing a profound transformation. While technologies such as renewable energy, hydrogen, LNG, and CCUS continue to advance in pursuit of carbon reduction, it is advanced materials that ultimately enable these innovations to become reality. POSCO Group is supporting the advancement of next-generation energy infrastructure by providing steel engineered to perform under extreme environments and demanding conditions. From PosMAC, a high-corrosion-resistant alloy-coated steel used in renewable energy infrastructure, to steel forming the foundation of hydrogen pipeline systems, high-manganese steel recognized as a key material for liquefied hydrogen storage tanks, and LT-FH36, a core steel for LCO₂ carriers, POSCO’s high-performance steel products are applied across a wide range of energy transition industries, each tailored to specific application requirements.

Strengthening ESS Safety with PosMAC: A High-Corrosion-Resistant Alloy-Coated Steel

▲ PosMAC is used as a material for ESS battery cases developed by LG Energy Solution.

As renewable energy expands and power efficiency becomes increasingly important, demand for energy storage systems (ESS) continues to rise. Because ESS must store electricity safely and reliably over long periods, corrosion-resistant materials are essential. POSCO’s high-corrosion-resistant alloy-coated steel, PosMAC, is widely used in ESS battery enclosures, ensuring long-term stability and durability.

PosMAC offers more than five times the corrosion resistance of conventional galvanized steel, maintaining reliable performance even in coastal, high-humidity, and high-salinity environments. This durability helps reduce carbon emissions and overall lifecycle costs. As a result, PosMAC is extensively applied across renewable energy infrastructure, including wind turbine tower components, offshore wind structures, and solar module mounting systems. By extending equipment lifespans and reducing maintenance requirements, PosMAC plays a key role in driving the growth of sustainable energy.

Beyond ESS battery enclosures, PosMAC is expanding into a wider range of components, including racks and Battery Protection Unit (BPU) cases. Through close collaboration with customers, POSCO continues to enhance the product’s reliability and application range, reinforcing PosMAC’s position as a core material in the renewable energy industry.

Steel for Hydrogen Pipelines: The Foundation of Hydrogen Infrastructure

▲ Model of hydrogen pipeline steel exhibited at the POSCO Group booth at the 2025 International Climate Industry Expo.

Hydrogen is a cornerstone of future clean energy systems, requiring uncompromising safety throughout its entire value chain—from production and storage to transportation. In particular, pipelines transporting high-pressure gaseous hydrogen must resist hydrogen embrittlement* while maintaining reliable performance under extreme conditions.

*Hydrogen embrittlement: A phenomenon in which hydrogen penetrates a material, significantly reducing the ductility and toughness of the metal.

POSCO’s steel for hydrogen pipelines was designed to meet these stringent requirements. By replacing imported seamless pipes previously used for hydrogen transport, POSCO has enabled domestic production while offering strong cost competitiveness, supplying the product at approximately 70% of the cost of imported alternatives. The steel provides sufficient strength and toughness to withstand impact at temperatures as low as –45°C, not only in the pipe body (base material) but also at welded joints. After rigorous testing by international certification bodies, it has been confirmed to meet hydrogen pipeline performance standards, earning official recognition for its safety and reliability.

By 2025, POSCO plans to introduce high-strength materials compliant with API X70 standards for use in high-pressure environments of up to 100 bar. Demonstration and verification testing will be conducted in collaboration with Korea Gas Corporation (KOGAS), Korea Gas Safety Corporation (KGS), Korea Research Institute of Standards and Science (KRISS), and domestic steel pipe manufacturers.

*API (American Petroleum Institute): An organization that establishes international standards for pipelines and steel products used in the oil and gas industry.

Challenging –253°C: High-Manganese Steel for Liquefied Hydrogen Storage Tanks

▲ Model of high-manganese steel liquefied hydrogen storage tank exhibited at the POSCO Group booth at the 2025 International Climate Industry Expo.

Liquefied hydrogen (LH₂) is drawing global attention as a core technology for hydrogen transportation and storage in the hydrogen economy. Stored and transported at an ultra-cryogenic temperature of –253°C, liquefied hydrogen places significantly higher demands on storage tank materials than liquefied natural gas (LNG), which is handled at approximately –163°C. Against this backdrop, POSCO’s high-manganese steel is recognized as a key material capable of maintaining stability under such extreme conditions.

Independently developed by POSCO as the first of its kind in the world, high-manganese steel contains more than 22% manganese (Mn). It offers outstanding performance at cryogenic temperatures while offering a unique combination of high strength, excellent wear resistance, and non-magnetic properties that minimize electromagnetic effects. Its yield strength exceeds 335 MPa—approximately twice that of conventional stainless steel—while high elongation ensures excellent formability. In addition, relatively low manufacturing costs* contribute to its economic competitiveness. As a result, high-manganese steel is widely used in LNG infrastructure, including storage tanks, carriers, pipelines, and terminals.

*Manganese used in high-manganese steel is abundant worldwide and relatively inexpensive.

▲ Inside view of Tank No. 7 at Gwangyang LNG Terminal 2. High-manganese steel has been applied to the inner tanks of Units 5 and 6, and it is planned to be applied to Units 7 and 8 to be constructed in the future.

Over the past decade, POSCO’s high-manganese steel has proven its reliability through certifications from leading global classification and certification bodies. In 2022, the International Maritime Organization (IMO) formally adopted international technical standards governing its application, allowing the material to be used in cryogenic cargo and fuel tanks without separate flag-state approval. In 2024, it was further registered under standards applicable to both LNG and ammonia cargo and fuel tanks.

Building on its extensive experience in LNG infrastructure, POSCO is working to improve the performance of high-manganese steel so that it can reliably withstand impact even at –253°C. Going forward, the company plans to conduct demonstration projects and feasibility assessments through the fabrication of liquefied hydrogen storage tanks in collaboration with customers, aiming to secure both safety and economic viability for future hydrogen infrastructure.

Applied to the World’s Largest 22,000㎥ Vessels: Steel for LCO₂ Carriers

▲ AI virtual image of a liquefied carbon dioxide (LCO2) carrier.

Liquefied carbon dioxide (LCO₂) carriers are specialized vessels designed to safely store and transport carbon dioxide captured through CCUS processes after it has been cooled and compressed into liquid form. As the carbon capture and storage (CCS) industry continues to expand, the need for materials that support safer and more efficient vessel operations is becoming increasingly critical.

Unlike LNG and ammonia, which can be transported in liquid form under low-temperature conditions alone, carbon dioxide must be transported under both low temperature and controlled pressure. Scaling up liquefied carbon dioxide storage tanks therefore requires advanced steelmaking technologies.

POSCO’s LT-FH36 steel for LCO₂ carriers is engineered to maintain stable performance at temperatures as low as –60°C, reflecting the design conditions of low-pressure LCO₂ tanks. It can be applied in thicknesses of up to 50 mm and provides a yield strength exceeding 355 MPa. Even after post-weld heat treatment (PWHT), the steel maintains stable mechanical properties, ensuring long-term reliability in environments with elevated risks of corrosion and structural failure.

LT-FH36 is the world’s first steel to receive certification for use in large-scale liquefied carbon dioxide transport tanks. In 2023, at the international maritime exhibition Nor-Shipping, Lloyd’s Register (LR), a globally recognized British classification society, awarded POSCO official certification for steel used in large-scale LCO₂ carriers.

▲ The world’s largest 22,000㎥ liquefied carbon dioxide (LCO₂) carrier currently under construction at HD Hyundai Mipo. It uses POSCO’s LT-FH36 steel.(Photo source: HD Hyundai Heavy Industries)

LT-FH36 is currently applied to the world’s largest 22,000m³-class liquefied carbon dioxide carriers. In anticipation of the industry’s shift toward ultra-large storage tanks to improve transport efficiency, POSCO has also become the first in the world to complete the development and certification of LT-FH51, a higher-yield-strength steel grade. Over the longer term, the company plans to introduce even stronger grades, such as LT-FH70, further strengthening the safety and efficiency of next-generation LCO₂ carriers.

From PosMAC and steel for hydrogen pipelines to high-manganese steel and LT-FH36, POSCO Group’s independently developed high-performance steel products are delivering greater safety, efficiency, and sustainability across the energy industry. POSCO Group will continue to strengthen its materials technologies to help shape the infrastructure of the future global energy landscape.

With the International Maritime Organization (IMO) set to implement a GHG pricing mechanism in 2028, new possibilities and opportunities in LNG core materials and gas business are coming up. We take a look at how the decision to impose this shipping carbon tax could impact POSCO Group’s business, alongside insights from Ki-Yoon Jang, Senior Researcher at POSCO Research Institute.

Senior Researcher Kee-Yoon Jang, POSCO Research Institute

I Upcoming GHG Pricing Mechanism to Drive Changes in Global Shipping

The IMO has finally gone ahead with the official introduction of a shipping carbon tax (GHG pricing mechanism). Starting in 2028, all vessels over 5,000 tons will be subject to the tax. This marks the outcome of long-standing discussions aimed at cutting down on greenhouse gas emissions from maritime transport.

▲ The 83rd Marine Environment Protection Committee (MEPC 83), held by the International Maritime Organization (IMO) from April 7 to 11. (Image source: Korea Maritime Safety Authority(KOMSA))

This decision was finalized at the 83rd session of the Marine Environment Protection Committee (MEPC 83), held recently. The IMO has set out a goal for the global shipping industry to cut back carbon emissions by up to 43% compared to 2008 levels by 2035. If this target is not met, shipping companies will have to pay out a carbon tax ranging from USD 100 to as much as USD 380 per ton of CO₂ emitted. The exact amount may vary depending on vessel size, voyage distance, and emission volume, but the industry does not take this lightly.

*IMO: A specialized agency of the United Nations responsible for protecting the marine environment and ensuring safe and efficient shipping.

The global revenue expected from the GHG pricing mechanism is projected to reach USD 10 billion annually, or approximately KRW 14.25 trillion. This poses a considerable burden on the shipping industry. However, the IMO’s decision is anticipated to go beyond simple taxation, serving as a catalyst for reducing carbon emissions across the maritime sector. Some shipping companies have already begun introducing LNG-powered vessels, which emit less greenhouse gases compared to conventional ships, and are expanding the use of low-carbon fuels in a proactive effort to respond to the new regulations.

I Background of the GHG Pricing Mechanism

According to data published by the International Energy Agency (IEA) in 2022, the transportation sector accounts for 16% of global greenhouse gas emissions. Of this, maritime shipping is responsible for approximately 2%. In other words, the shipping industry accounts for approximately 2% of total global greenhouse gas emissions. This figure is by no means insignificant, especially when compared to road transport (12%) and aviation (1%). Accordingly, the role of the maritime sector in achieving global decarbonization goals has become increasingly critical.

The issue of GHG emissions from international shipping began to receive serious attention in the early 2000s. In 2003, the International Maritime Organization (IMO) initiated its first studies on GHG emissions in the maritime sector. Although the Kyoto Protocol*, which entered into force in 2005, assigned legally binding reduction targets to developed countries, the shipping sector was not directly included. Instead, responsibility for regulating maritime emissions was delegated to the IMO, leading to growing expectations for its role. Since then, the IMO has introduced energy efficiency standards for ships, implemented mandatory fuel consumption reporting systems, and actively advanced discussions on market-based measures such as carbon pricing and emissions trading schemes to address maritime carbon emissions.

In 2023, talks on introducing a GHG pricing mechanism in international shipping really picked up speed. The IMO drew up a new greenhouse gas (GHG) strategy and officially adopted the goal of achieving carbon neutrality in international shipping by 2050, thereby setting in motion the full-scale introduction of a GHG pricing mechanism. As a result, at the 83rd session of the Marine Environment Protection Committee (MEPC 83) held in April this year, it was decided that the GHG pricing mechanism would take effect in 2028. Once IMO member states agree on specific rates and application standards through further discussions, the mechanism is expected to be implemented as planned.

*Kyoto Protocol: An international agreement adopted at the 3rd Conference of the Parties (COP3) to the United Nations Framework Convention on Climate Change (UNFCCC), held in Kyoto, Japan, in 1997. It was the first legally binding treaty to set greenhouse gas (GHG) emission reduction targets for developed countries, covering gases such as carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O). The protocol entered into force in 2005. While developed countries were subject to reduction obligations, developing countries were exempt.

I Anticipated Increase in Demand for LNG-Related Core Materials Following Implementation of the GHG Pricing Mechanism

How is the implementation of the GHG pricing mechanism expected to affect the shipping industry? In particular, vessels operating on conventional marine fuels such as marine gas oil (MGO) and heavy fuel oil (HFO) are likely to experience a significant rise in operating costs. By contrast, LNG (liquefied natural gas)-powered vessels emit 20-30 percent less CO₂, making them subject to a considerably lower tax burden. As a result, demand for LNG fuel is expected to increase*, prompting shipping companies to increasingly consider LNG-fueled vessels when placing new ship orders. This shift is expected to be especially evident in long-haul routes and large vessel segments, such as container ships and oil tankers.

*Although the expansion of LNG usage may lead to increased methane (CH₄) emissions in the long term, and competition with zero-carbon fuels such as ammonia and hydrogen is inevitable, LNG is expected to maintain its position as a transitional fuel in the maritime sector through 2040.

▲ The photo above shows Gwangyang Terminal 1, completed by POSCO International in July. POSCO International is currently developing dedicated LNG bunkering infrastructure at the Gwangyang LNG terminal as part of its related business initiatives. A 12,500㎥ LNG bunkering vessel is under construction and is scheduled to begin full-scale operation in the second quarter of 2027, upon delivery. (Image Source: POSCO International)

As the number of LNG-powered vessels increases, the demand for LNG bunkering is also expected to rise. Rather than building LNG storage and refueling facilities at every port, constructing bunkering vessels that can supply LNG at sea is considered more cost-effective. Accordingly, the increase in LNG-fueled ships is likely to lead to a corresponding expansion in LNG bunkering infrastructure at ports. Major ports are expected to invest in LNG bunkering terminals or bunkering vessels, with demand projected to grow rapidly in global hub ports such as Singapore, Rotterdam, and Busan.

In addition, the demand for materials used in LNG storage and transportation is also expected to be affected. Since LNG must be stored and transported at an ultra-low temperature of -162°C, demand for cryogenic insulation materials such as vacuum insulation panels and aluminum alloys, as well as highly corrosion-resistant and heat-resistant materials, is projected to increase. Key materials used in LNG-powered vessels and bunkering applications include high-nickel steel (9% Ni steel) for cryogenic service, Invar alloy, high-manganese steel, and vacuum insulation panels.

For a standard LNG carrier with a capacity of 174,000㎥, it is estimated that approximately 1,500 to 2,000 tons of high-nickel steel, 500 to 700 tons of Invar alloy, and 10,000 to 12,000㎡ of vacuum insulation are required. A bunkering vessel with a capacity of 7,500㎥ typically uses 600 to 800 tons of high-nickel steel, 200 to 300 tons of Invar alloy, and 4,000 to 5,000㎡ of vacuum insulation panels. These core materials are essential for ensuring stability and efficiency under cryogenic conditions, and are therefore expected to contribute to the continued growth of the materials industry.

▲ POSCO’s independently developed high-manganese steel for cryogenic applications was officially listed in 2022 as a material standard under the IGC Code by the MSC of the IMO. It is now approved for use in cryogenic cargo tanks and fuel tanks for LNG, LPG, and other liquefied gases. The photo shows high-manganese steel being transported by a vacuum suction crane.

I POSCO Group’s Strategic Direction in the Era of Expanding LNG Propulsion

▲ POSCO Group’s first LNG-dedicated carrier ‘HL FORTUNA’.

Starting with the implementation of the GHG pricing mechanism in 2028, the IMO is expected to strengthen taxation standards and raise the per-ton charge over time. As a result, the number of LNG-powered vessels is projected to increase further.

Currently, LNG-fueled ships account for less than 10 percent of the global fleet, with a total of 1,308 vessels. By 2028, the number is expected to exceed 2,300, and the number of bunkering vessels will need to increase from the current 23 to at least 50.

In line with this trend, POSCO Group is introducing LNG-dedicated carriers to respond to the GHG pricing mechanism and other international environmental regulations, while actively expanding its energy business. On May 23, POSCO Group unveiled its first proprietary LNG carrier, HL FORTUNA, at HD Hyundai Samho in Mokpo, Jeollanam-do.

HL FORTUNA is an LNG carrier with a length of 299 meters, a beam of 46.4 meters, and a cargo capacity of 174,000㎥. It is built for transporting North American LNG. The vessel can carry out a single shipment that supplies Korea’s entire population with natural gas for 12 hours. It is fitted with a dual-fuel system that uses LNG as its main fuel, along with a high-efficiency reliquefaction system that cools down boil-off gas and turns it back into liquid fuel, enabling compliance with international environmental regulations.

After completing sea trials, the vessel will go into global LNG trading in the second half of the year. Starting in 2026, it will load cargo at the Cheniere terminal in Louisiana, United States, and will be used for domestic supply and overseas trading. It is expected to make over five round trips annually based on the Gwangyang LNG Terminal, transporting POSCO International’s long-term LNG volumes from North America.

With the introduction of this LNG carrier, POSCO Group has further built up its LNG value chain, covering production, storage, and power generation. Moving forward, the Group plans to keep up with rapidly changing international environmental regulations and seek out new opportunities across its LNG business and other key areas by leveraging group-wide synergies and capabilities.

With the Trump administration recently easing restrictions on LNG exports and actively leveraging tariffs in trade negotiations, the entire LNG value chain—production, storage, transportation, and utilization—is gaining attention. Back in 2008, POSCO anticipated a steady increase in LNG demand as a response to tightening global environmental regulations. POSCO recognized the need for new materials to secure a competitive edge in the materials market for LNG storage and transportation. For this reason, it turned its focus to manganese alloy steel, and thus began the development of high-manganese steel. We sat down with Senior Researcher Soon-gi Lee, who is at the heart of the development, certification, and commercialization of this next-generation material.

Q. POSCO’s high-value-added steel, developed in-house, is drawing attention. What exactly is POSCO’s high-manganese steel, and what makes its manufacturing process unique?

POSCO’s high-manganese steel is a new type of steel alloyed with a high content of manganese (Mn, 22.5–25.5%). Compared to conventional materials such as stainless steel, 9% nickel steel, and Invar alloy, POSCO’s high-manganese steel offers comparable performance, but significantly better cost competitiveness. Most importantly, it retains excellent mechanical properties even at cryogenic temperatures as low as -196°C, making it ideal for LNG storage tanks and carriers.

When manganese is added to steel, introducing solid manganese directly into the molten metal can cause a drop in temperature. To prevent this, we melt the manganese before adding it, rather than inputting it in solid form. Typically, adding manganese increases wear resistance and strength, but this comes at the cost of ductility (the property of stretching easily without breaking). However, thanks to POSCO’s decades of accumulated know-how in controlled rolling and cooling techniques, we have succeeded in producing a ductile product despite the high manganese content. Production is currently taking place at our heavy plate plant, and both the material composition and manufacturing method have been bundled into a single patented package.

Q. You said POSCO melts the manganese first to avoid lowering the temperature of the molten steel. But if your competitors build similar melting facilities, won’t they be able to catch up?

Though it sounds simple, POSCO’s proprietary technology is embedded throughout the process. Manganese alloys often contain impurities, so refining during the intermediate stages is critical. Predicting the behavior of molten manganese is also one of our hidden core technologies. Our facilities for producing molten manganese and storing it in insulated furnaces will not be easy for our competitors to replicate.

Q. Is POSCO the only company that can produce high-manganese steel?

Some steelmakers produce general-purpose high-manganese steel. However, in applications requiring higher manganese content, such as the cryogenic (24%) and slurry pipe (18%) grades used in the energy industry, POSCO leads in technological capability.

Q. How does POSCO’s high-manganese steel compare with competing materials?

POSCO’s high-manganese steel meets all the requirements for LNG transport and storage, and offers several advantages over existing materials. It exhibits high strength and excellent elongation* properties.

While most steel materials used for LNG transport and storage contain a high amount of expensive nickel, nickel has been completely replaced with manganese in POSCO’s high-manganese steel. The manganese used in high-manganese steel is abundant worldwide and relatively low in cost, making the final product approximately 30% cheaper than conventional alternatives. Its high elongation makes it easy to process, and it is also highly resistant to hydrogen embrittlement. Having recently been approved for ammonia applications, it can now be used for most liquefied gases, including natural gas, ammonia, and CO₂.

*Elongation: The ratio by which a metal can stretch before breaking; it indicates ductility.

Q. What are some current applications of POSCO’s high-manganese steel?

▲POSCO International’s Gwangyang LNG Terminal tank using POSCO high-manganese steel.

Currently, it is being used in Gwangyang LNG Terminal units 5 and 6, Hanwha Ocean’s VLCCs, container ship LNG fuel tanks, and onshore LNG storage tanks. We are working toward expanding its use in LNG carriers and other applications. Beyond LNG, POSCO aims to promote high-manganese steel across various industries as a symbol of Korea’s technological strength.

Q. Could this steel eventually be used in LNG carriers, not just LNG-fueled ships? Doesn’t using thick plates reduce capacity?

POSCO manufactures high-manganese steel as thick plates. Onshore storage tanks are built with thick plates, and LNG carriers can be built using either thin membrane sheets (about 0.7–1.2 mm) or thick plates (6–40 mm). Compared to membrane systems, thick-plate LNG carriers are structurally more robust and better withstand sloshing from LNG motion, providing superior safety under various conditions. Recently, President Trump mentioned Korea’s potential involvement in the Alaska LNG project. To navigate through thick Arctic ice, LNG carriers would need to be icebreaking LNG ships. In such cases, high-manganese steel made in thick plates offers a clear advantage.

There is no reduction in capacity. Shipbuilders simply redesign the hull based on the plate thickness. The standard capacity is 174,000 m³, and designs are adjusted accordingly.

▲The 2024 IMO General Assembly in London invited Korea to present POSCO’s achievements.

Q. We read that POSCO’s high-manganese steel is setting global standards. What does that mean?

Materials for energy applications must adhere to strict international standards. For example, ships sail through international waters, so they aren’t subject to just regional or national regulations—they must comply with global standards. Since POSCO’s high-manganese steel was the first of its kind, no existing standards applied, so we had to create them ourselves. Despite continued resistance from our competitors, we succeeded in registering the material with ASTM, API, ISO, and IMO standards. These international standards are based on POSCO’s technology, meaning that other companies must follow our specifications—effectively making POSCO’s technology the global benchmark.

In particular, the International Maritime Organization (IMO), a UN-affiliated body that sets standards for shipbuilding and operation, formally requested the Korean government to present at the 2023 General Assembly when POSCO’s high-manganese steel received final approval. The IMO viewed the 10-year approval journey led by POSCO and the Korean government as a highly successful and exemplary case, and wanted to share it with member states.

Q. There seems to be a longstanding connection between Chairman In-hwa Chang and high-manganese steel.

▲(Left) Hanwha Ocean’s crude oil carrier equipped with a high-manganese steel LNG fuel tank in 2022 (Right) Hanwha Ocean’s ultra-large container ship equipped with a high-manganese steel LNG fuel tank in 2024.

Chairman In-hwa Chang has a deep understanding of both shipbuilding and steelmaking, having majored in naval architecture and marine engineering as a student and later worked as a researcher in the steel industry. This unique background has allowed him to make significant contributions to the development and broader adoption of high-manganese steel.

He played a key role in our solid track record* by ensuring the material was actually used in onshore and marine storage tanks, which laid the foundation for future sales growth. Back in 2017, when POSCO was planning to construct the No. 5 LNG terminal in Gwangyang, the initial plan was to use conventional materials. However, as executive vice president at the time, Chairman Chang personally made the decision to use POSCO’s high-manganese steel instead.

His strategy was to create a proven reference case using POSCO’s own material, thereby paving the way to enter new markets. He also believed that involving POSCO E&C for construction and POSCO International for operations would maximize group-wide synergy. He further helped open a new market for ship applications by driving the use of high-manganese steel in LNG fuel tanks for LNG-powered vessels.

Hanwha Ocean (formerly DSME) was initially hesitant to adopt the new material for LNG-powered ships, as safety assurance is critical for such large-scale vessels. During his term as POSCO CEO in 2020, Chairman Chang met directly with Hanwha Ocean’s top management and strongly advocated for the safety and reliability of the steel. As a result, in 2022, Hanwha Ocean became the first in the world to use high-manganese steel in LNG fuel tanks for a very large crude carrier (VLCC), which was followed by its application in container vessels.

* Track Record: Operational data collected after applying newly developed technologies or products under real working conditions

Q. Beyond the current market, what are the growth prospects for high-manganese steel?

Outside the LNG value chain, POSCO is leveraging the wear resistance and non-magnetic properties of high-manganese steel to explore new markets. Despite severe deformation, its non-magnetic properties do not deteriorate, which enhances stealth capabilities when applied to submarines, warships, and military tanks, thereby pushing for demand expansion as a material for the defense industry.

I didn’t know that LNG was such an Sustainable energy source. As you mentioned, various technology developments are needed to use LNG better. Then, what is POSCO’s solution for the LNG industry?

First, let me introduce POSCO’s lineup of steel materials for low temperature and cryogenic applications. At POSCO, there is a trio fit for the purpose: 9% nickel steel, high manganese steel, and STS304L. Let’s see each one of them in detail.

l Presenting POSCO’s Trio for the LNG Industry

– No.1: 9% Nickel Steel

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9% nickel steel? Let me guess! It’s a steel product with 9% nickel, right?

Exactly. 9% nickel steel is the most widely used steel for cryogenic application. This is because nickel maintains outstanding strength and toughness even at extremely low temperatures. 9% nickel steel was first developed by an American company, INCO, in 1944, and its safety was proven through model testing in 1960. Since then, it has been widely used as a material for storage tanks of extremely low-temperature use. However, nickel has a downside: it is expensive, and its supply and demand are unstable.
In addition, 9% nickel steel could only be produced by few steelmakers in the past, so domestic shipbuilders had to depend on imports. Fortunately, POSCO succeeded in developing it for the first time in 1993, and after quality stabilization, production for the material has been accelerated from 2007. Recently, POSCO has been in active cooperation with the Big 3 shipbuilders in Korea — Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering (DSME), and Samsung Heavy Industries — to develop their own technology for LNG storage tanks using this material.

– No.2: High Manganese Steel

High manganese steel? Is it steel with a lot of manganese?

You’re right. POSCO started developing high manganese steel for cryogenic application in 2010, and in 2013, succeeded in creating the new material for the first time in the world. The steel contains 22.5 to 25.5% manganese and is not easily damaged even at minus196 degrees Celsius. Unlike conventional carbon steel, which breaks under very low temperatures, high manganese steel can withstand such a harsh condition.

What’s the difference from 9% nickel steel?

Both steel products are applicable to extremely low temperatures, but they have a huge difference: cost competitiveness. Compared to nickel, manganese is more economical and has a stable supply and demand system, thanks to its abundant reserves. The cost of material is about 30% more economical for high manganese steel than 9% nickel steel, and the cost of welding is also much lower as well. Both 9% nickel steel and stainless steel are excellent steel materials for constructing LNG tanks. But since they were quite costly, POSCO developed high manganese steel as an alternative solution to the problem.
According to the regulations of the International Maritime Organization (IMO), only nickel alloy steel, stainless steel, 9% nickel steel, and aluminum alloy steel were permitted to be used as cryogenic materials for LNG tanks on board an LNG carrier. However, in 2018, high manganese steel also received official approval, which shows international recognition of POSCO’s technical excellence.

– No.3: STS304L

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Stainless 304L? I can’t guess this one.

Stainless steel contains nickel as well. 304 means that the stainless steel is “austenitic” at room temperature, and L means that it has low carbon content — under 0.03%. Stainless steel is much more machinable compared to 9% nickel steel and high manganese steel, so it is widely used in thick steel pipes and machinery of LNG plants. However, there are needs from certain clients who wish to use stainless steel for LNG tanks, so POSCO continues to develop technology and provide solutions regarding this steel.

Wow. POSCO developed a new steel product for the LNG industry? That’s amazing. I wouldn’t have imagined that the city gas I use at home was related to POSCO.

Right. But the real solution story hasn’t begun yet. Of course developing a new steel product is significant, but making sure that it is adopted and utilized by clients is much more important. POSCO has been involved in the R&D of LNG tanks with clients for many years so as to make LNG more economical and safer for us. Now let’s talk about our remarkable achievements.

l POSCO’s Solution for LNG!

Among 9% nickel steel, high manganese steel, and STS304L, POSCO’s clients may choose the optimal steel product according to the specifications of the LNG tanks they build. And POSCO provides the best solutions accordingly — regardless of which product it is.

– Solution for 9% Nickel Steel: Reducing Cost for Clients with the World’s Largest Size, Sharing Technology with SMEs!

Following a long period of research, vessels with LNG fuel tanks adopting POSCO 9% nickel steel are finally being constructed. They are none other than ‘HL ECO’ and ‘HL Green’ of Hyundai Samho Heavy Industries. Both vessels are 180,000-ton LNG-powered bulk carriers where POSCO’s 9% nickel steel is applied as materials for their fuel tanks. At the end of this year, both vessels will be delivered to the shipowner, H-Line Shipping. Other than the fuel tanks, POSCO steel plates were used in the body of the ships as well. Put differently, these vessels are the achievements of full localization — from materials to fuel tank technology. And here is another special solution from POSCO. POSCO can produce 9% nickel steel of all thicknesses required for LNG tank production and also “ultra-wide & long” nickel steel as well!

Ultra-wide & long? What’s so special about that?

LNG tank producers manufacture the tanks with 9% nickel steel in flat form and weld them piece by piece to build the tank. However, welding is costly and takes a long time, which has a significant impact on the overall process. So, the issue for POSCO clients was this: ‘How do we reduce the number of weldings?’ Also, the welding material for 9% nickel steel is especially more expensive than conventional steel. That’s why POSCO developed large-sized products to reduce welding points and costs.

When making a tank of the same size, welding 30 sheets of steel would definitely be much more efficient in terms of time and cost than welding 50 sheets of steel.

POSCO currently produces the world’s largest 9% nickel steel for shipbuilding. After six months of R&D, POSCO established a system to produce a product of up to 4.3m x 20m, which previously was limited to 3.85m x 15m. POSCO’s own R&D was important, but what mattered more were the many tasks and regulations to be resolved so as to apply this product in the actual field. So POSCO proactively discussed the quality of nickel steel with the British LR (LLOYD’S REGISTER OF SHIPPING) classification and based on the result, carried out the tank design, structural feasibility review, and performance testing with Hyundai Mipo Dockyard. The COVID-19 pandemic almost precluded the joint research, but POSCO installed a conference calling system for the client and continued cooperation. As a result, the first batch of ultra-wide & long 9% nickel steel could be supplied successfully to Hyundai Mipo Dockyard in April!

So those LNG tanks must be under production now.

POSCO’s ultra-wide & long 9% nickel steel is used in producing LNG fuel tanks for Hyundai Mipo Dockyard’s 25,000-ton DWT carrier for petrochemicals. This carrier is equipped with a dual-fuel engine that can utilize both bunker fuel and LNG. It is like a hybrid car at sea. The vessel will be completed in March next year and delivered to the ship owner, Bermuda’s MERIDIAN.

I’ve heard that Korea is an LNG carrier powerhouse. I also heard that Korean shipbuilders received orders for 118 out of 124 LNG-powered vessels from shipping companies around the world in the last three years — from 2017 to 2019. Now with these LNG tank materials and technology, Korea’s competitiveness is bound to become stronger!

You’re right. POSCO is looking for ways to keep growing together with SMEs who are producing LNG tanks as well as major shipbuilding companies. To help SMEs overcome the long-term recession in the shipbuilding industry, POSCO is providing them with the application technology of 9% nickel steel and high manganese steel on LNG fuel tanks free of charge. POSCO shares processing and welding technologies of 9% nickel steel and high manganese steel and invites global shipping companies to promote the products by SMEs in Korea. Thus, a stable industrial ecosystem where the mill, SMEs, and shipbuilding companies work jointly is created.

– Solution for High Manganese Steel: Breaking New Ground in the LNG Industry with New Material!

So you said that high manganese steel is a new product developed by POSCO, right? Then its application technology must have been developed from scratch.

Since high manganese steel was not a certified material in the LNG industry, it could not be applied to commercial projects in the beginning. So, POSCO worked on getting the material approval first, starting from the Korean Industrial Standard (KS) in 2014 to the American Society for Testing and Materials (ASTM) in 2017 and the International Organization for Standardization (ISO) in 2018, respectively. The first case of high manganese steel applied successfully to LNG tanks is “Green Iris,” Korea’s first LNG-powered vessel, built in 2017. This vessel was built jointly by POSCO and Hyundai Mipo Dockyard and was spotlighted since it was the “world’s largest” LNG-powered bulk carrier that adopts POSCO-developed high manganese steel for the “first time in the world”. Currently, the vessel is in operation on the sea, transporting limestone from Gangwon Province to Gwangyang Works.

So LNG tanks made of high manganese steel are already being used? The progress has been made rapidly!

Recently, an onshore LNG storage tank made of high manganese steel has also commenced commercial operation. In its initial stage, high manganese steel was not registered on the domestic standard or LNG terminal-related design code, so it was necessary to revise the standards first. To verify the safety of these onshore LNG storage tanks adopting high manganese steel, POSCO even constructed and operated a pilot tank.
The test was conducted supposing that the life of the tank is 50 years. The process of filling the tank with LNG and draining it was repeated more than 1,000 times. After the test, the tank was disassembled, and technical evaluation confirmed that there was no problem with the performance of the high manganese steel. In 2019, the Korean Gas Technical Standards Committee listed high manganese steel on the KGS code as verified material for onshore LNG storage tanks, thus enabling commercialization. Soon after, tank No. #5 at Gwangyang LNG receiving terminal was constructed with high manganese steel, with a storage capacity of 200,000 ㎘, and it has been under operation since last April.

▲ POSCO high manganese steel was applied to the LNG fuel tank of Green Iris (left) and the tank No. #5 at Gwangyang LNG receiving terminal (right)

– Solution for STS304L: Developing Independent LNG Storage Tank Model with Stainless Steel!

Another significant achievement is an independent LNG storage tank model made with POSCO STS304L. This model is ‘SOLIDUS’ of Daewoo Shipbuilding & Marine Engineering Co., Ltd. SOLIDUS adopts double stainless steel barriers to prevent LNG leakage and maximize safety. This design technology also obtained certification — to be suitable for application in actual LNG carriers — from the top 5 major global ship classification companies, such as LR (U.K.), ABS (U.S.), and DNV-GL (Norway). POSCO conducted various performance tests of STS304L in an LNG storage environment to support the development of SOLIDUS by Daewoo Shipbuilding & Marine Engineering Co., Ltd.

The cooperation between POSCO and its clients is bearing fruit. It seems that POSCO has succeeded in capturing eco-friendliness and technical competitiveness at once! Will there be more to expect?

POSCO is participating in a study to construct the 6th LNG storage tank at Gwangyang LNG receiving terminal by upgrading its high manganese steel technology. The company also plans to utilize the technology for overseas projects once the international design code has been revised. Recently, a major European oil company that reviewed the application of high manganese steel showed a favorable response for its competitiveness at “Gastech 2020,” an international gas conference. In addition, POSCO is joining forces with its clients so that 9% nickel steel and STS304L can also be the key to the development of LNG tank technology.

When it comes to energy, the first things that come to mind would be fossil fuels, coal and oil in particular. These two most common energy sources aren’t considered Sustainable. On the contrary, the next most frequently used energy source is Liquefied Natural Gas (LNG), and this is referred to be Sustainable!

l Liquefied Natural Gas Emerging as a Major Energy Source

Do you know anything about LNG? I heard that LNG is made by liquefying natural gas and also that this LNG will become the next generation energy source. Am I right?

Yes, you are right. At present, there are many POSCO’s customers engaging in the LNG industry, ranging from LNG vessels, LNG tanks, to LNG equipment. And they strongly insist that LNG will become the next ‘major’ energy source. In fact, the International Energy Agency (IEA) announced that, in the future, LNG will overtake coal as the second dominant energy source following crude oil. In 2019, the global demand for LNG reached 359 million tons, a 12.5% increase compared to 2018, and some predict that it will increase to 700 million tons by 2040.

What is the reason for all this?

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What matters are environment and safety. These days, we are slowly getting rid of products and technology that aren’t Sustainable. Coal and crude oil — the most commonly used energy sources — are fossil fuels and emit fine dust (PM 2.5), sulfur oxides (SOx), and nitrogen oxide (NOx) when utilized. Hence, both energy sources are far from being Sustainable. In the case of nuclear power plants, safety became an issue after the Fukushima nuclear disaster. Of course, there are other renewable energies like wind and solar power, but they are still insufficient to replace fossil fuels entirely.
In the case of LNG, dust, sulfur, and nitrogen are removed during the liquefaction process, so when it is burned, pollutants can be significantly reduced compared to other fossil fuels. It is also lighter than air, so in case of a leakage, it can be blown away easily. The chances of an explosion are also low since its ignition temperature is high. Those are the reasons why LNG has been spotlighted these days.

l LNG, How Helpful Is It to the Environment?

I heard that demand for LNG-powered vessels has increased dramatically in the shipping industry because of the new regulations issued by the International Maritime Organization (IMO) 2020. I guess that is why?

You know that EV, hydrogen cars, and hybrid vehicles are popular these days, right? But did you know that the amount of SO₂ emitted by the top 15 large vessels adds up to more than all vehicles combined worldwide? No wonder why the transition from bunker fuel-powered vessels to LNG-powered vessels is in progress.

Then can you compare the environmental impact of LNG-powered vessels and bunker fuel-powered vessels? I want to check whether LNG is indeed Sustainable.

OK! Let’s take the ‘Green Iris’ vessel, propelled by LNG, as a model vessel and compare the two following cases: a) when operated on LNG with a fuel tank made of 9% nickel steel, high manganese steel, and b) when operated on conventional bunker fuel with a fuel tank made of regular steel plate.
Let’s suppose that the vessel takes a round trip from Busan Port to the Port of Singapore once a month for 25 years. The environmental impacts include not just the operation period but the manufacturing stage with 9% nickel steel, high manganese steel, and regular steel plate as well. Setting the conventional bunker fuel as 100%, let’s take a look at the level of acidification, global warming, and resource consumption of LNG.

Wow. The acidification effect of LNG-powered vessels is almost halved compared to that of bunker fuel-powered vessels. While the level of global warming and resource consumption goes down to 73% and 64%, respectively.

Can you see how beneficial it is to use LNG in the long run? The main reason why regulation was enforced on bunker fuel is because of SOx, and, in LNG, the amount of SO₂eq emission — including SOx — is slashed to 630 tons, the half of 1,220 tons emitted by the bunker fuel scenario’s.

SOx? Doesn’t it precipitate fine dust? So, utilizing an LNG-powered vessel can help reduce almost 600 tons per ship!

Also, the emission of greenhouse gases (CO₂eq), such as carbon dioxide, a major cause of global warming, amounted to 360,000 tons in the bunker fuel scenario and 264,000 tons in the LNG applied scenario. It shows that an LNG-powered vessel can reduce carbon dioxide emissions by about 90,000 tons compared to a bunker fuel-powered vessel. Imagine that this 90,000 ton is discharged into our planet. One pine tree can absorb about 6.6 kg of carbon dioxide per year, so 90,000 tons is equal to the amount that can be absorbed by 13.6 million trees for a year.

What? 13.6 million trees? That’s a LOT. Then, what is this resource consumption impact?

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Resource consumption indicates the degree of natural resources depleted due to the consumption of fossil fuels. The index is not simply based on how much natural resource is consumed quantitatively, but it also takes into account how many of these natural resources remain. Hence, it could provide us with information beforehand so that no excessive resources are consumed. The higher the number, the greater the degree of depletion. And as demonstrated here, LNG has less impact on resource consumption than bunker fuel.

l LNG, How Helpful Is It to the Environment?

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If LNG is that good, why do we keep using coal and oil until now?

That’s because we lacked the technology to apply it. A downside of LNG is that its liquefaction process, transportation, and storage are quite tricky. Since LNG required enormous investment to create a value chain such as processing and transporting, it did not receive much attention in the past. Natural gas needs to be cooled down to below -163 degrees Celsius to become LNG. And it took quite a long time to develop technologies and materials suitable for this condition.

You mean that we produce the gas in gas fields, liquefy, and use it in liquid form? I heard that the city gas we use is LNG, but isn’t this in gas form?

Well, the supply chain of LNG is quite complicated. First, the natural gas produced at gas fields is shipped to the LNG liquefaction plant via pipeline. Here, the gas is liquefied and formed into LNG. This LNG is then transported with a specialized vessel called an LNG carrier, and when the LNG arrives onshore, it is stored in the LNG storage tanks at the LNG terminal, where it is vaporized into gas once again. Finally, it is sent to power plants or city gas companies through a pipeline.

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Wow. I didn’t know that LNG goes through so much before we get to use them. So I guess it requires advanced technology as well?

Yes, it does. The core technology is about tank design. And among other things, the material would be the most crucial part. The first LNG plant to be built on a commercial scale was the Cleveland plant in the U.S. in 1941. However, the plant was shut down in 1944 due to the destruction of the LNG tank during operation. The material used in making the LNG tank was known to be vulnerable to low temperatures, and it was one of the reasons why the LNG tank was damaged.

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I guess research on LNG tank materials wasn’t active back then. So we need a material that is strong enough to be used at very low temperatures.

When you apply force to an object, it withstands to a limit, deforms, and eventually breaks. Most materials become weaker at low temperatures. You must have seen that when an object quickly freezes, it tends to break easily. When LNG is unloaded and stored, its temperature changes rapidly — ranging from room temperature to below -163 degrees Celsius. And of course, the LNG tank should be able to withstand such dramatic temperature changes. Also, the material should have excellent machinability and be cost-efficient so that it can be fabricated into the desired structure.

Then we cannot use normal steel to make LNG tanks, right? What should we use then?

This is where POSCO’s steel solution steps in! Let me introduce you to the details from now on.

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☞ See [GPS] #2 POSCO’s Solution for the LNG Industry! (ep.2)

Globally, shipping accounts for 15 percent of N0x emissions, 8 percent of S0x emissions and 3 percent of greenhouse gas (GHG) emissions, while aviation accounts for just 1.5 percent of GHG emissions. Overall, emissions including GHG are increasing with booming trade and industrial activity, and policymakers are facing mounting pressure to deal with the crisis.

SEE ALSO: The Changing Waves of the Shipping Industry

Urgency of Clean Air

Experts found that in 2015, 6.5 million people died prematurely as a consequence of air pollution, with 92 percent of the deaths occurring in developing countries such as India, China, Pakistan, Bangladesh, Madagascar and Kenya. In these countries, up to 25 percent of all deaths are pollution related. In India alone, 2.5 million people died from pollution, China saw 1.8 million pollution-related deaths and even in the U.S., more than 155,000 deaths were linked to air pollution.

In China, fog-like smog covers cities. (Source: South China Morning Post)

As a result, governments and international organizations all over the world started implementing environmental policies under growing pressure from well-informed citizens. For example, China has shut down a number of factories across the country and has policies in place to heavily regulate emissions as part of their “Beautiful China” initiative. Also, the International Marine Organization (IMO) announced it will tighten the international sulfur cap for shipping emissions from the current 3.5 percent to 0.5 percent by 2020.

Such initiatives are great first steps, as making the switch to cleaner marine fuels such as low-sulfur fuel will lead to 137,000 fewer premature deaths caused by air pollution and 8 million fewer cases of childhood asthma. However, with increasingly stringent environmental regulations, the shipping industry is eyeing more sustainable and renewable fuel options.  

Liquified Natural Gas

Currently, the most common and feasible option available for minimal emissions is liquified natural gas (LNG). Many shipping companies are embracing this option ahead of IMO’s 2020 emissions cap as LNG emits zero S02 and particulate matter, and up to 25 percent less C02 and up to 90 percent less N0x.

As a result, major oil companies are channeling their resources towards LNG production and manufacturers are opting for LNG-powered ships to lower their life cycle emissions. However, the downside to LNG as shipping fuel is that LNG tanks require more space on vessels. They also add considerable weight, meaning the vessel will use up more fuel.

LNG is the most feasible option for shipbuilders and manufacturers looking to lower emissions. (Source: Oil Industry Insight)

This is where steel can play a vital role in equipping shipbuilders with the lightest and strongest material options. This year, Hyundai Mipo Dockyard will build the world’s largest LNG-powered bulk carrier capable of yielding 50,000 tons of cargo, which is seven times more than existing LNG carriers. The company chose to build their vessel using POSCO’s High Manganese Steel, which is lightweight, tough, super strong and is able to facilitate the storage temperature of LNG at -162℃. Not only that, the steel is also cost effective when compared to other material options for ships.

SEE ALSO: POSCO’s High Manganese Steel to be Used for the World’s Largest LNG-Powered Bulk Carrier

Renewable Energy

Another company making exciting waves in the shipping industry is Eco Marine Power. The technology company is developing an alternative energy solution called Aquarius Marine Renewable Energy that will allow cargo ships to run on wind and solar energy. Rigid sails and solar panels will be placed on the exterior of cargo ships to directly generate and store energy and energy levels can be monitored via a computer-based system. This year, researchers are planning to put the system to the test with a Japanese shipping company to monitor the system’s performance, energy generation and the vessel’s energy consumption.

Eco Marine Power will put its energy solution to the test this year. (Source: Eco Marine Power)

Last year, Chinese shipping company Hangzhou Modern Ship Design & Research Co launched a cargo ship powered by an electric battery powertrain. The 2000-ton capacity vessel runs on two 160 kW electric propellers, supercapacitors and lithium batteries that provide a range of about 80 km per charge. For now, it is being used for short trips to carry coal up and down the Pearl River in Guangdong Province, and at each end, the vessel only takes about 2 hours to charge.

China launched the world’s first fully-electric cargo ship. (Source: China Minutes)

Again, the challenge for companies experimenting with renewable energy options will be dealing with the additional weight of generators and battery packs. The feasibility of sustainable cargo ships lies in the vessel’s energy efficiency, and heavier vessels will take up too much energy. As 90 percent of all trade goods cross the sea at one point in their life cycle, it will be impossible to decrease shipping activities. Instead, manufacturers will have to partner with solutions providers like POSCO for high-performing, lightweight materials to achieve clearer skies and a future of green shipping.

Cover photo courtesy of Global Economic Dynamics.

Upon completion, the Green Iris will transport limestones from the port of Donghae in Gangwon-do to Gwangyang Works from the beginning of 2018.

POSCO’s high manganese steel allows the fuel tank to withstand temperatures as low as -196℃, so that it can store and transfer LNG. Moreover, it is highly weldable and cost-efficient compared to other common materials for LNG fuel tanks such as nickel steel or aluminum alloys.

POSCO developed the technology for its high manganese steel after 10 years of research since the late 2000s. Now, it is one of POSCO’s leading World Premium Products (WPP). Due to strengthening environmental regulations worldwide on emissions of sulfur oxides, nitrogen oxides and carbon dioxide from vessels, demand for high manganese steel for LNG tanks are expected to increase dramatically.

Cover photo courtesy of Gas Asia Summit.

1. #Winning – competitiveness and sustainability

POSCO was recently named the world’s most competitive steelmaker for the eighth consecutive year by World Steel Dynamics (WSD). POSCO again took home the gold with the highest scores in five categories including innovative technology, cost reduction, skill level of labor, restructuring and investment environment.

POSCO is the world’s most competitive steelmaker.

Not only did POSCO come out on top for competitiveness, the company was ranked 35th among the “Global 100 Most Sustainable Corporations in the World in 2017,” by Toronto-based magazine and research firm Corporate Knights. The list was announced in early 2017 at the World Economic Forum in Davos, Switzerland. This is the third consecutive year POSCO made the list with outstanding scores in safety, environment and the salary levels of employees.

2. Joining the trillion club

POSCO entered the trillion club twice in 2017 as it recorded USD 1.283 billion (KRW 1.365 trillion) of operating profits in the first quarter, and USD 1.0581 billion (KRW 1.1257 trillion) in the third quarter based on its consolidated operating profit. Even in the midst of global oversupply and governments opting for protectionist policies, POSCO’s profits were unscathed. Much of the credit is owed to the company’s steel and non-steel affiliates overseas with strong sales performances. The consolidated debt-to-equity ratio was the lowest since 2010 and the non-consolidated debt-to-equity ratio was at its lowest ever.

POSCO recorded an operating profit over KRW 1 trillion in the first and third quarter of 2017.

To add, international credit rating agency S&P upgraded POSCO’s BBB-plus credit rating outlook to “stable” last February, and Moody’s also upgraded POSCO’s long-term corporate credit rating outlook to “positive” on October 26.

3. Everything’s bigger in…POSCO

Last June, after 102 days of repair, Pohang Blast Furnace No.3 became the world’s fifth-largest blast furnace. Its internal volume expanded from 4350㎥ to 5600㎥, allowing the super-sized blast furnace to put out 15,000 tons of molten metal daily. POSCO currently operates five super-sized blast furnaces, or blast furnaces sized 5500㎥ or larger.

Pohang Blast Furnace No. 3 under construction.

POSCO further upgraded Pohang Blast Furnace No.3 by adding in AI capabilities. It is now equipped with smart technology that can control the internal state of the blast furnace automatically, and smart sensors can now predict accidents before they happen, extending the lifespan of the furnace. Furthermore, POSCO plans to collect big data from the blast furnace and use it to develop fully smart blast furnaces in the future.

4. The smarter the better

Since his taking up the CEO position in 2014, POSCO CEO Ohjoon Kwon has repeatedly expressed his vision for securing future competitiveness through smart solutions. The company even started a smartization training course for employees and held the Smart POSCO Forum 2017 last July to share its insights and progress with clients and affiliates.

POSCO is gaining a competitive edge through smart solutions. (Source: Global Trade Magazine)

Moreover, POSCO also supported a smart talent training project customized for SMEs. The program included job training for AI and big data application technologies. Going forward, POSCO plans to build a “Smart Industry” to increase steel competitiveness and create new business opportunities with new, smart technologies.

SEE ALSO: How Factories Produce Steel- the Smart Way

5. Getting in on electric vehicles

The market for electric vehicles (EVs) is an exciting one with so many companies investing in new technologies. POSCO also hopes to extend its customized material and technology solutions to EV manufacturers. Last October, the company held the Global EV Materials Forum to showcase four of its core business areas: lightweight bodies, batteries, motors and charging infrastructure. More than 380 clients took part in the forum to learn about emerging trends and POSCO’s products and services including POSCO GIGA STEEL and commercially produced lithium batteries for EVs.

POSCO is a solutions provider for EV manufacturers. (Source: Bloomberg)

6. POSCO’s new marketing approach

For the first time ever, POSCO created and aired a TV commercial highlighting a specific product, instead of its corporate brand. This marks POSCO’s first B2C marketing effort and features the company’s innovative auto steel, POSCO GIGA STEEL. The commercial compares POSCO GIGA STEEL to aluminum, another widely-used lightweight material in a visual demonstration so that everyday drivers can better understand the benefits of a stronger yet lighter material.

7. Going for 10 million tons of automotive steel

On April 26, POSCO completed 7CGL, a new steel production facility in Gwangyang, Korea, designed exclusively for the production of POSCO GIGA STEEL. 7CGL has an annual capacity of 500,000 tons and is the world’s first plant capable of producing both 1.5 giga-level galva-annealed (GA) and galvanized (GI) steel sheets.

POSCO Completed 7CGL on April 26, 2017. (Source: Business Korea)

In addition, POSCO managed to reduce investment funds and secure cost competitiveness by designing and constructing 7CGL’s core facilities based on accumulated facility technologies and operating know-how. The 7CGL is POSCO’s 12th plant exclusively for automotive steel sheets, and POSCO aims to sell 10 million tons of automotive steel in 2018 globally.  

8. Setting new records with high manganese

POSCO became the first company in the world to commercialize the technology for producing high manganese using fusible ferroalloys. The technology took KRW 5.5 billion of research and development costs and four years to complete.

POSCO is the first company in the world to commercialize its high manganese production technology. (Source: Eramet)

The core part of POSCO’s high manganese production process is PosLM (POSCO Liquid Manganese), a special holding furnace that stores manganese ferroalloys in a fusible state. POSCO’s technology reduces the production time for high manganese steel by more than 50 percent as well as increases slab production efficiency. PosLM was jointly researched and developed by the Institute of Technology and POSCO M-tech.

9. Bringing home the lithium

On February 7, POSCO opened its PosLX (POSCO Lithium Extraction) plant with an annual capacity of 2,500 tons. The plant is the first plant in Korea capable of commercial lithium production. The technology took 7 years to perfect, but it was well worth it. The production process for high purity lithium now takes just 3 months, compared to the previous 12 to 18 months.

POSCO is making lithium extraction more efficient and sustainable. (Source: Mining)

In the past, Korean manufacturers imported the entire quantity of lithium they needed. With POSCO’s PosLX plant, partners now have access to a local supply of lithium. Moreover, POSCO plans to use lithium phosphate extracted from wasted secondary batteries as raw materials, in keeping with the company’s sustainability standards.

POSCO will continue building on a successful 2017 in the new year, by tackling new challenges and continuing to provide its partners with customized and optimal solutions in all business areas.

Cover photo courtesy of Hitech Building Solutions.

The LES issues the Deals of Distinction Award once a year to the most valuable licensing agreements in 5 sectors: Life Sciences, High Technology, Consumer Goods, Chemicals, Energy, Environment & Materials and Industry-University-Government Interface, or contracts that solved business issues in creative and innovative ways.

From left, Dong-eun Lee leader of the Energy Plant Materials Sales Group, Dr. Andrew Wasson, ExxonMobil Engineering Specialist, Se-don Choo, head of the Energy and Shipbuilding Materials Marketing Department, and Timothy Kinn, ExxonMobil Senior Commercial Advisor.

Last March, POSCO entered into a licensing agreement with ExxonMobil, the world’s largest oil company, for the production and supply of high manganese steel for slurry pipes. For the past 5 years, the two companies jointly developed POSCO’s high manganese steel for ExxonMobil’s oil sand slurry pipes and commercialized it for the first time ever.

SEE ALSO: Five High Manganese Steels for Limitless Innovations

The LES reviewed the licensing agreements of candidates and awarded POSCO and ExxonMobil the honors. The major factors taken into account were the reduction of time from materials development to market application from a standard 10 years to 5 years, and the drastic extension of steel pipe lifespan. The LES believes such improvements will reduce the overall operating costs for the oil sands industry.

Se-don Choo, head of POSCO’s Energy and Shipbuilding Materials Marketing department said, “The performance of POSCO’s high manganese steel has been recognized in various areas through collaboration with global enterprises. I hope that there will be many more cases of mutually beneficial cooperation between POSCO and its partners using high manganese steel in the future.”

Nowhere is growth stronger than in China

Unlike in most developed countries, many of China’s younger citizens (25- to 45-year-olds) are able to afford a cruise. According to Cruise Lines International Association’s Senior Vice President of Strategic Marketing and Communications, Lorri Christou, the Asian cruise industry is seeing more travelers than ever. Executive Vice President of the China Cruise and Yacht Industry Association, Zheng Weihand, expects 2.5 million travelers by 2020, 4.5 million by 2025, and seven million by 2030.

The swimming pool on Royal Caribbean’s Ovation of the Seas cruise ship at the port of Tianjin. (Source: Today Online)

The growing demand is having a positive effect on the Chinese shipbuilding economy as well.

Vice-chairman of the Chinese organizing committee of Marintec China, Fu Chunhong, said that China State Shipbuilding Corp is among a number of Chinese shipbuilders that are proactive in building cruise liners. The Chinese government prioritizes subsidies and development support for the cruise industry, and many ports are upgrading their infrastructure to handle new tonnage and more ships.

With time, China could become the world’s largest cruise market as the middle class in China continues to grow. They are seeking luxury vacation cruises, and this is being encouraged by the Chinese government that supports lenient annual leave policies.

Major global players are also making a move

Chinese companies may be ripe for growth due to favorable government policies and financial support, but they still lack in technology in comparison to major players in the global cruise industry such as Carnival Corporation, Royal Caribbean Cruises Ltd. and Norwegian Cruise Line.

Carnival Corporation

Carnival recently marked the start of construction of seven next-generation cruise ships to be fully-powered by LNG. These ships, due between 2018 and 2022, will be the first able to use LNG or 100 percent of their power. This comes after its installation of Exhaust Gas Cleaning Systems (EGCS) on 60 of their existing cruise ships, reflecting the company’s vision for more sustainable business practices.

Carnival Corporation’s deployment in China includes vessels from Princess Cruises, including the Sapphire Princess, a cruise ship built to be based in Shanghai, and the Majestic Princess which was designed as a year-round international luxury vessel specifically tailored to Chinese guests.

Royal Caribbean

Having helped fund two new Royal Caribbean vessels in 2015, KfW IPEX is funding more cruise liners, with 2.8 billion euros in shipping loans earmarked. They are also looking to meet the demand of global passengers, growing at a rate of 4.5 percent per year.   

Royal Caribbean is mobilizing its best gear in the Chinese market. Its “Quantum of the Seas,” for example, travels the region year-round, alongside “Ovation of the Seas,” vessels tailored for Chinese passengers.

A night view of the Carnival’s Regal Princess, part of the Princess Cruises. (Source: Cruise Mapper)

Norwegian Cruise Line

Norwegian Cruise Line’s Norwegian Bliss is another example of a purpose-built ship that is customized for the promising Chinese market. The first domestically manufactured cruise liner, however, will be constructed at Waigaoqiao Shipbuilding Co Ltd., and is scheduled to be delivered in 2023. China will then see one vessel per year between 2024 and 2028.

Implications for the Global Steel Industry

With the growth of the Chinese market increasing demand for new ships and the continued, worldwide demand for environmental sustainability, shipbuilders are turning to liquified natural gas (LNG) for greener shipping. This will mean that there will be a sustained growth in demand for LNG-related steel.

For example, POSCO supplies all the stainless steel for Korea Gas Corporation’s membrane-type LNG carriers, as the exclusive supplier of stainless steel for membrane material in Korean and international markets.

An LNG carrier. (Source: Shipping Tribune)

POSCO’s cryogenic high manganese steel, which has been registered as a standard technology, is being used to make a ship that can run on bunker C oil and LNG, and can carry more than 7 times the usual largest load (for an LNG-powered bulk carrier) of 7000 tons. POSCO aims to build an overseas market for high manganese steel with Korean shipbuilders.

Demand for LNG-related steel will continue to benefit from the growing global cruise market and increased cruise shipbuilding. POSCO is one steel supplier that hopes to continue to provide material solutions for the shipbuilding industry, especially for green, LNG-powered cruise ships, with its premium products.