Photo = Yonhap news

 

 

[Alpha Biz= Kim Jisun] Seoul, South Korea — July 9, 2025 — POSCO Group is in the final stages of completing the sale of its only steel production facility in China, Zhangjiagang Pohang Stainless Steel (PZSS), to China's Tsingshan Group for an estimated KRW 400 billion (approx. USD 290 million), according to industry sources.



Established in 1997 in Jiangsu Province, PZSS was once hailed as a model of POSCO's successful overseas expansion and was even dubbed the "Little POSCO" in China. The plant, a joint venture with China’s Shagang Group, was built to counter rising imports of low-cost Chinese stainless steel into Korea and to tap into China’s growing domestic demand. It has an annual production capacity of 1.1 million tons—more than half of Korea's total stainless steel output—and POSCO holds an 82.5% stake in the company.



PZSS posted steady annual profits in the hundreds of billions of KRW during the mid-2000s and generated nearly KRW 3 trillion in revenue as recently as last year. However, the Chinese government’s drive for steel self-sufficiency led to massive oversupply, intensifying price competition and eroding profitability. With China's stainless steel production capacity now estimated at 30 million tons—well above domestic consumption of 24 million tons—PZSS has posted annual losses exceeding KRW 100 billion in recent years, prompting POSCO to exit the business.



The buyer, Tsingshan Group, is the largest stainless steel producer in China and the world’s top nickel supplier. The acquisition will further consolidate its dominance in both stainless steel and nickel markets.



Analysts note that the sale is part of POSCO’s broader strategy to restructure its global operations amid mounting pressures from Chinese overcapacity. Additional divestitures may follow, as several of POSCO’s 38 overseas subsidiaries—particularly those in Argentina and Türkiye—have also been reporting sustained losses.

 

 

 

 

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