Tsingshan and POSCO Join Forces in Indonesia, 2 Million MT Stainless Steel Plant Anchors Core Position in Southeast Asia

On September 26, 2025, POSCO and Tsingshan Holding Group formally signed an agreement to jointly build a stainless steel plant with an annual capacity of 2 million metric tons in the Morowali Industrial Park, Sulawesi Island, Indonesia. This capacity is equivalent to South Korea’s total national stainless steel output.

Under the equity arrangement, POSCO acquired a 44.12% stake in PT Xinheng Metal Indonesia, a subsidiary of Tsingshan, while Tsingshan retains the remaining 55.88% stake. The two parties will jointly operate and manage the project, which is scheduled to start construction in 2026. POSCO’s investment will exceed 1 trillion KRW (approximately 708.3 million USD).

This marks a critical step in POSCO’s restructuring of its Asia-Pacific supply chain. In July 2025, POSCO sold its 1.1 million MT annual capacity stainless steel plant in China to Tsingshan, formally shifting its core stainless steel production focus to the Southeast Asian market. Leveraging Indonesia’s world-leading nickel reserves, robust infrastructure demand driven by the construction of the new capital Nusantara, and a favorable trade and tariff environment, the project will help Tsingshan improve product quality and break through certification and trade barriers in European and American markets. Meanwhile, it enables POSCO to mitigate overseas investment risks and strengthen its production layout in Southeast Asia.

POSCO currently operates the Krakatau POSCO integrated steel mill in Indonesia with an annual capacity of 3 million metric tons. With the new plant, its footprint in Southeast Asia is further consolidated, and Indonesia is rapidly transforming from a raw material supplier into a global high-end stainless steel manufacturing base.

Four-Year Breakthrough in Electrode Rod Localization, Equipment from Hwapeng Precision Machinery Group Supports Key Success

Electrode rods are core consumables for steelmaking. Previously, South Korea imported more than 30,000 metric tons of electrode rods annually from China, Japan, and India, exposing its supply chain to external risks.

In 2020, South Korea’s Ministry of Trade, Industry and Energy launched a national project titled “Development of Artificial Graphite Electrode Rod Technology (300mm or Above)”. Led by POSCO Future M, the project teamed up with the Research Institute of Industrial Science & Technology (RIST), POSCO MC Materials, Pohang University of Science and Technology (POSTECH) and other institutions. After 4 years and 9 months of R&D, the technology was successfully localized.

Notably, the localization trial could not have succeeded without Chinese equipment support. On the day of the announcement, POSCO sent a congratulatory letter to Shandong Hwapeng Precision Machinery Group Co., Ltd., confirming that the 300mm ultra-high power graphite electrodes produced using HP-H(H)KC-SG Series High Efficient Preheating Kneading Cooling System For Special Graphite and HP-CEP Series Carbon Extrusion Press  passed steel furnace trials. The superior performance of Hwapeng group’s equipment was instrumental to the breakthrough. As a national-level “Little Giant” specialized and sophisticated enterprise, Hwapeng Precision Machinery Group’s export of high-end equipment represents a model of industrial chain collaboration between China and South Korea in the steel sector.

Internal Strength & Global Expansion: Technological Independence Empowers Globalization, Reshaping Steel Industry Division

POSCO’s two recent moves form a strategic closed loop:

• Domestically, electrode rod localization fills a key material gap, reduces supply chain risks, enhances the overall competitiveness of South Korea’s steel industry, and aligns with the low-carbon transition from coal-fired furnaces to electric arc furnaces.
• Globally, partnering with Tsingshan in Indonesia integrates resources, technology and market advantages to seize opportunities from theover 70% growth in the global stainless steel market between 2024 and 2032, driving the global stainless steel supply chain toward regionalization and resource integration.

From high-end material localization to cross-border production collaboration, POSCO builds on technology and market orientation to form complementary cooperation with global partners including Tsingshan Holding Group and Hwapeng Precision Machinery Group. This highlights new trends in resource restructuring and technological collaboration in the global steel industry, and sets a new paradigm for high-end manufacturing cooperation between China and South Korea.