South Korea’s Top Steelmaker Rethinks Battery Metal Investments

(Bloomberg) -- Posco Holdings Inc. said it will slow the pace of its planned investments in battery metals in the face of a supply glut and slowdown in demand growth for electric vehicles. 

The South Korean steelmaker will reconsider or postpone increasing its presence in the refining of metals like lithium and nickel to after 2027, the company said in a statement as it released its first-quarter earnings. Most of the expansion was previously set to take place in 2026. 

“We’re going through a complete overhaul of our existing spending plans to prepare ourselves for weakening profit margins,” Lee Jutae, head of corporate strategy at Posco Holdings, said on an earnings conference call on Thursday. “We’re considering downsizing some of the investments, as well as our planned capex.”

The company — South Korea’s biggest steelmaker — reported a 14% drop in operating profit in the three months through March from a year earlier, worse than the average analyst estimate. It’s shares closed down 0.9% in Seoul. 

Posco is revising its investment strategy as the prices of lithium, nickel and cobalt have been battered by a supply glut and waning demand for EVs. Planned manufacturing capacity for lithium-ion battery cell will be almost five times higher than expected consumption by the end of 2025, according to BloombergNEF.

South Korean battery maker LG Energy Solution Ltd. also said it will slow spending plans and focus on making cheaper batteries, at a time when major automakers are caught up in an intensifying price war. 

Posco will rethink its goal of having 15,000 tons of nickel refining capacity and 40,000 tons of cathode output outside South Korea, it said in the statement. It will also reconsider plans to establish natural and artificial graphite production.

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