Steel profitability and battery materials earnings emerge as near-term tests
With Chang’s term running through March 2027, execution is becoming as important as the long-term vision
POSCO Group Chairman Chang In-hwa has laid out an ambitious plan to transform the South Korean steelmaker into a broader supplier of critical resources, targeting combined revenue of KRW 187 trillion ($135 billion) and operating profit of KRW 13.1 trillion by 2035.
The strategy, unveiled at POSCO Group’s CEO Investor Day in July, expands the group’s growth focus beyond steel and battery materials into natural resources and energy. Chang described a “Triple Core” portfolio encompassing industrial resources, strategic resources and energy resources.
Under the plan, POSCO aims to strengthen its position across steel, lithium, cathode and anode materials, rare earths, liquefied natural gas and renewable energy, positioning the group as a major supplier of critical resources amid growing geopolitical and supply-chain uncertainty.
The direction reflects structural pressures facing POSCO’s traditional businesses. Global steel markets continue to grapple with Chinese overcapacity and rising trade barriers, while the electric vehicle industry has experienced slower-than-expected demand growth and volatile battery material prices.
POSCO has responded by accelerating both overseas investment and portfolio restructuring.
In India, POSCO is pursuing an integrated steel mill in Odisha with JSW Steel, India’s largest steel producer. The planned facility will have an initial annual production capacity of 6 million metric tons, giving POSCO a larger manufacturing presence in one of the world’s fastest-growing major steel markets.
The group is also expanding partnerships across the battery supply chain. Its recent cooperation with China’s Ronbay Group includes potential collaboration in battery-grade lithium and other battery materials, part of POSCO’s broader effort to establish an integrated value chain from raw materials to advanced battery components.
At the same time, POSCO has been disposing of non-core and low-return assets to redirect capital toward businesses with stronger long-term growth potential.
The bigger question, however, is how quickly that strategy can translate into earnings.
POSCO Holdings reported consolidated revenue of about KRW 69.1 trillion and operating profit of roughly KRW 1.8 trillion in 2025. Its return on equity stood at just 0.8%, leaving a wide gap between current profitability and the targets envisioned for 2035.
That makes the recovery of the group’s core steel business particularly important.
POSCO Holdings showed signs of an earnings rebound in the second quarter of 2026, but the operating environment remains challenging. Chinese steel oversupply, expanding protectionist measures, raw material costs and currency fluctuations continue to pose risks to profitability.
Another test is whether POSCO’s heavy investment in battery materials can begin generating sustainable returns.
POSCO Future M, the group’s battery materials unit, reported operating profit of KRW 26.7 billion in the second quarter, while its battery materials business returned to the black. POSCO’s lithium operations in Argentina have also begun showing signs of improving profitability.
The turnaround is encouraging, but a few quarters of improvement will not by themselves settle the question.
POSCO has invested heavily in lithium resources and battery materials using cash generated by its steel operations. The ability of those businesses to develop into independent and meaningful earnings contributors will therefore be critical to the group’s future valuation.
Chang himself has already set 2026 as an important year for results.
At POSCO Holdings’ annual shareholders’ meeting in March, he described 2026 as an “inflection point for creating tangible results,” pledging to strengthen competitiveness in steel and battery materials.
Just months later, the CEO Investor Day broadened that vision further by placing resources alongside steel and materials at the center of POSCO’s future portfolio.
For investors, the key issue is therefore shifting from how many new growth businesses POSCO can identify to how effectively its existing investments can generate returns.
Timing adds another dimension.
Chang’s current term as an inside director of POSCO Holdings runs through March 2027. POSCO has abolished its previous system that gave an incumbent chairman preferential consideration for another term, meaning management performance, strategy and leadership would take on added significance should Chang seek another term.
Chang has not publicly announced whether he intends to do so.
Regardless of that decision, the coming months are likely to place greater attention on the results produced under his leadership.
Since taking office, Chang has pushed portfolio restructuring, overseas steel investment and the expansion of POSCO’s battery materials value chain. His latest strategy extends that transformation into critical minerals and energy.
The focus is now moving from what POSCO plans to build to what those investments actually deliver.
The KRW 187 trillion revenue target is a vision for 2035. But its credibility will be shaped much sooner by steel margins, battery materials earnings, returns from overseas investments and the group’s ability to generate cash from its expanding portfolio.
Chang’s plan to transform POSCO from a steel-centered conglomerate into a global critical resources supplier has entered a stage where execution matters as much as ambition.
The numbers POSCO produces over the remainder of his current term may provide the first meaningful test of whether the KRW 187 trillion vision can move from a long-term blueprint to a sustainable growth model.
