POSCO is stepping up investment in high-end automotive steel as it seeks to strengthen its position in the rapidly evolving global mobility market.
The Korean steelmaker said Tuesday that it had begun construction of its eighth continuous galvanizing line, or 8CGL, at its Gwangyang Works in South Korea. The facility will have an annual production capacity of 450,000 metric tons and is scheduled for completion in 2028.
POSCO plans to invest approximately 480 billion won in the project, which comes as automakers increasingly demand higher-performance steel for larger and more premium vehicles.
The new facility will specialize in hot-dip galvanized steel used primarily for automotive exterior panels. The material offers strong corrosion resistance, a high-quality surface finish and good formability, making it particularly suitable for vehicle body panels.
Demand for premium galvanized automotive steel has been rising as automakers expand their lineups of large SUVs and recreational vehicles while placing greater emphasis on exterior quality, durability and design.
The 8CGL will also strengthen POSCO's ability to supply wider automotive steel sheets for large vehicles. Once the facility is completed, POSCO's total annual production capacity for hot-dip galvanized steel is expected to reach 4.95 million tons.
The project marks POSCO's first new hot-dip galvanizing facility since 2017 and represents a strategic move to upgrade its automotive steel portfolio.
“This investment is a strategic move to strengthen our competitiveness amid rapid changes in the global steel ecosystem,” POSCO CEO Lee Hee-geun said at the groundbreaking ceremony. “By establishing a specialized automotive steel facility capable of producing next-generation, high-quality products while improving cost and technological competitiveness, we will further solidify our technology leadership in the global market.”
Another key feature of the new facility is its integration with a newly built electric furnace. POSCO plans to use the two facilities together as a production base for lower-carbon automotive steel.
The 8CGL will incorporate ultra-high-temperature heat-treatment equipment optimized for electric-furnace steel. The move is designed to help POSCO respond to growing demand from global automakers for lower-carbon steel products as the automotive industry accelerates its transition toward more sustainable manufacturing.
POSCO is also targeting higher productivity and quality through artificial intelligence.
The company plans to apply AI technology developed from more than three decades of operational expertise to analyze material, process and quality data in real time. The system will be used to control production equipment, reduce quality variations and defects, and improve overall manufacturing efficiency.
Robotics and AI will also be introduced for high-risk operations involving molten zinc, including tasks such as removing impurities and collecting samples. Through these technologies, POSCO aims to accelerate the transformation of its manufacturing operations into an AI-driven production system while improving workplace safety.
The investment forms part of POSCO's broader strategy to turn Gwangyang Works into a specialized production hub for next-generation mobility materials.
POSCO Group Chairman Chang In-hwa said in July that the group would strengthen its role as a national materials leader through a “Triple-core” strategy centered on industry, strategy and energy resources.
Within its steel business, POSCO plans to focus on strengthening its fundamental competitiveness through technology leadership, cost innovation and a timely transition toward low-carbon production.
The company has designated eight products as core strategic products, including Giga Steel for vehicle bodies and HyperNO, a high-efficiency non-oriented electrical steel used in electric vehicle drive motors.
With the 8CGL investment, POSCO aims to move beyond simply expanding production capacity and build a more competitive automotive steel business capable of meeting the industry's demands for premium quality, wider products and lower-carbon materials.
The company expects the new facility to strengthen its partnerships with global automakers while supporting their efforts to respond to rapidly changing mobility trends.
