POSCO Commissions 2.5 Mt EAF and Rare-Gas Plant at Gwangyang in Low-Carbon Portfolio Pivot

POSCO Group has simultaneously inaugurated two new production facilities at its Gwangyang complex in South Jeolla Province, according to a June 17 report from GreenPost Korea. The first is a large electric arc furnace (EAF) with an annual capacity of 2.5 million tonnes; the second is a high-purity rare gas production plant targeting the semiconductor and aerospace supply chains. The company describes the dual commissioning as a deliberate structural shift away from a model centred exclusively on traditional blast-furnace steelmaking.

The EAF is presented in the source as a direct defensive response to carbon cost exposure. The article cites the EU Carbon Border Adjustment Mechanism and tightening South Korean domestic emissions permit rules as concrete threats to the price competitiveness of conventional steel exports. To address the acknowledged quality ceiling of scrap-fed EAF steel for premium applications such as automotive sheet, POSCO says it has developed a proprietary technique for blending hot metal from both furnace types, described in Korean as 합탕 (合湯). The company further characterises the EAF build-out as transitional infrastructure toward its longer-term hydrogen-based direct reduction steelmaking programme, referred to in the source by the acronym HyREX.

The rare gas facility captures neon, krypton, and xenon as by-products of the oxygen-generation step already embedded in existing steelmaking operations, requiring no new raw material sourcing. POSCO frames this as a supply-chain resilience move, given that global rare gas supply is geographically concentrated and vulnerable to geopolitical disruption. An unnamed industry official quoted by the outlet cautioned that the real measure of both investments will be whether they can achieve economic viability within a credible timeframe — pointing to scrap steel supply imbalances, rising electricity costs, and the structural carbon footprint of grid power as ongoing risks to EAF competitiveness, alongside the high capital demands of eventually scaling HyREX.