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Key Takeaways POSCO secured its first major LFP cathode order, supplying over 190,000 metric tons from 2027 to 2032. POSCO is converting Pohang lines to LFP production, targeting customer certification and supply by late 2026. POSCO plans to use steelmaking by-product iron oxide and Argentine lithium to improve LFP cost. POSCO Holdings Inc. (PKX - Free Report) , via its subsidiary POSCO Future M, is strengthening its position in the global battery-materials industry as its unit makes a major entry into the lithium iron phosphate (LFP) cathode-material market.  

POSCO has reached a large-scale, long-term supply agreement with a major South Korean battery manufacturer to supply more than 190,000 metric tons of LFP cathode materials over six years from 2027 through 2032. The two companies are expected to finalize the terms and sign a formal contract in the third quarter of 2026. 

The agreement marks POSCO's first major LFP cathode-material order and represents an important diversification of its battery-materials portfolio, which has historically been focused on high-nickel cathode materials. LFP batteries are increasingly being adopted in energy storage systems (ESS) because of their lower cost, long cycle life and thermal stability. Demand for LFP-based ESS is rising rapidly in North America as electricity consumption increases and utilities and data-center operators invest in large-scale energy storage. The expansion of AI data centers is further supporting this trend by increasing demand for reliable power infrastructure. 

To support the new business, POSCO has converted part of its Pohang facility's existing high-nickel cathode production lines to LFP production. Customer prototype certification is currently underway, with mass production and supply targeted to begin by the end of 2026. This approach allows the company to enter the LFP market relatively quickly while leveraging existing manufacturing infrastructure rather than relying entirely on new capacity. 

A key competitive advantage will be POSCO Group's vertically integrated raw-material supply chain. POSCO plans to improve the cost competitiveness of its LFP cathode materials by using iron oxide generated as a by-product of POSCO's steelmaking operations along with lithium sourced from salt lakes in Argentina. This could help reduce raw-material costs and strengthen supply-chain security, which is particularly important as North American customers seek alternatives to Chinese battery-material suppliers. 

The company is also pursuing additional cathode and anode material supply agreements with global battery manufacturers and automakers, leveraging its integrated supply chain and technological capabilities to navigate evolving trade regulations across key markets.  

In March, POSCO secured a large-scale, long-term contract worth approximately KRW 1 trillion with a global automaker to supply synthetic graphite anode materials. To support growing demand, the company is investing approximately KRW 357 billion to establish a new synthetic graphite anode material plant in Vietnam, which will further expand its production capacity. 

Separately, CNP New Material Technology, a joint venture between POSCO and FINO-CNGR, began construction of an LFP cathode-material plant at the Yeongil Bay General Industrial Complex 4 in Pohang in May. The facility is expected to begin mass production in 2027, with production capacity planned to be expanded in phases to as much as 50,000 tons annually. 

PKX’s Price Performance

Shares of POSCO have gained 8.2% over the past year compared with a 22.5% decline in its industry.

mage Source: Zacks Investment Research

PKX’s Zacks Rank & Other Key PicksPKX currently carries a Zacks Rank #2 (Buy).

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The Zacks Consensus Estimate for MMM’s current-year earnings is pegged at $8.96 per share, indicating a 11.2% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, with the average earnings surprise being 4.1%. 

The Zacks Consensus Estimate for GFF’s current fiscal-year earnings is pegged at $5.41 per share. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average earnings surprise being 6.6%. 

POSCO NYSE: PKX Holdings reported higher second-quarter earnings as profit improved across its steel, rechargeable battery materials and energy businesses, while its Argentina lithium operation posted its first quarterly operating profit.

The company recorded consolidated revenue of KRW 19.3 trillion in the second quarter of 2026, up KRW 1.4 trillion from the prior quarter. Operating profit rose 16% sequentially to KRW 819 billion, while quarterly EBITDA totaled KRW 1.9 trillion. Capital expenditures were KRW 2 trillion during the quarter and KRW 3.7 trillion for the first half.

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Seung-Jun Kim, head of Finance and IR at POSCO Holdings, said the results were achieved despite energy-supply risks associated with the Middle East conflict and continued weakness in the Korean won. He said profit increased from the prior quarter in each of the company’s major steel, rechargeable battery materials and energy segments.

Steel Profit Recovery Expected to Continue POSCO’s steel business increased profit by KRW 58 billion from the prior quarter. The company said rising logistics and energy costs, exchange-rate movements and raw-material volatility created headwinds, but higher production and sales volumes, along with partial price increases, supported a recovery.

POSCO, the company’s steelmaking affiliate, reported separate operating profit of KRW 270 billion, up KRW 60 billion sequentially. Management expects steel performance to improve further in the third quarter as increased production offsets fixed costs and the company pursues higher sales volumes and prices.

Roh Sung-rae, chief of the Marketing Office, said the company expects to take a gradual approach to price adjustments in the second half. In automotive steel, POSCO is negotiating under formula-based pricing and plans to phase in the effects of oil-price movements and other volatility. In shipbuilding, where demand remains strong, the company plans to continue reflecting cost variables in prices. Home-appliance steel pricing remains more conservative as production shifts toward Southeast Asia, he said.

On European trade conditions, the company said Europe accounts for roughly 10% to 15% of POSCO’s total exports, depending on the year. POSCO said it is working through government discussions to minimize the impact of quota reductions and plans to focus on higher-margin products in Europe. It also said it would shift volumes to other markets if necessary.

The company completed its 2.5 million-ton electric arc furnace, or EAF, in Gwangyang in June. During the early operating period, it plans to blend molten iron from blast furnaces and the EAF to make general-purpose steel, while continuing development work on higher-grade products, including automotive and electrical steel. POSCO said the facility is intended to help address European carbon-border and environmental regulations.

Management said the EAF’s cost is included in its second-half business outlook. The company is testing supplies of carbon-reduced steel with global original equipment manufacturers and energy companies, and expects that a premium market for such products can help offset higher costs. It said profitability should improve as utilization rises and production of higher-grade products expands.

Lithium Business Reaches Milestones The rechargeable battery materials business returned to an operating surplus for the first time in nine quarters, reporting operating profit of KRW 41 billion. POSCO Argentina recorded operating profit of KRW 11 billion, its first quarterly profit since incorporation, as sales volume climbed 160% from the first quarter and revenue rose 290%.

POSCO expects a temporary slowdown in Argentina during the third quarter because winter conditions in the Southern Hemisphere reduce pond evaporation and the company is replacing LP dryer equipment. Plant 1 is expected to resume full operation in the fourth quarter, when sales of certified products are also expected to begin. Management said uncertified products may be sold at about a 10% discount, making certification an important potential driver of profitability.

Plant 2 in Argentina is in its initial operating stage and is scheduled for full commissioning in October. The company said Plant 1 should be able to offset initial ramp-up costs at Plant 2 in the fourth quarter and potentially exceed its second-quarter performance.

POSCO Pilbara Lithium Solution increased revenue to KRW 102 billion and reduced its operating loss to about KRW 1 billion. However, management said its margins remain sensitive to the price spread between spodumene and lithium hydroxide, which is currently unfavorable. The company said it will monitor market conditions and respond as needed.

POSCO is also evaluating further lithium expansion. Management said it plans to conduct a pre-feasibility study for Argentina phases three and four by the end of 2026 and expects a final investment decision by the end of 2027. Those phases would target lithium carbonate production rather than lithium hydroxide.

Infrastructure, Restructuring and Safety POSCO International delivered its highest quarterly and first-half operating profit, with profit up 22% from the prior quarter. Higher selling prices and favorable foreign exchange in Myanmar gas fields, expansion of the Senex gas field, and newly acquired Indonesian palm production supported the results.

POSCO E&C reported operating profit of KRW 44 billion for the second quarter and KRW 97 billion for the first half, recovering from a KRW 452 billion temporary loss last year.

The company said 12 restructuring projects completed during the first half generated KRW 475.4 billion in additional cash. These actions included divestments of Chinese steel operations, including POSCO-CSPC, QPSS and the FCS processing center. POSCO Holdings expects restructuring initiatives to generate KRW 3.5 trillion in free cash flow by 2028.

Management also addressed a fatality at construction affiliate POSCO E&C in June. The company said it is strengthening safety management and, with safety adviser dss+, is assessing safety risks across 33 group affiliates. It plans to identify risks and corrective action plans by October.

About POSCO (NYSE:PKX)POSCO NYSE: PKX is a South Korea–based integrated steel producer founded in 1968 as Pohang Iron and Steel Company. Headquartered in Pohang, the company grew rapidly as part of South Korea's industrialization program and developed large, integrated steelworks—most notably in Pohang and Gwangyang—that helped establish POSCO among the world's largest steelmakers. It is structured as a diversified industrial group with steelmaking at its core and a range of downstream and trading businesses.

The company's primary activities include ironmaking and steelmaking, producing a wide array of steel products such as hot-rolled and cold-rolled sheets, coated steels, plates, stainless and special steels, long products (bars and wire rods), and seamless pipes.

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Key Takeaways POSCO completed its first global bond worth $500M, with demand reaching about $2B. PKX tightened pricing by 30 basis points after the offering was four times oversubscribed. POSCO will use proceeds to repay foreign-currency debt and support general corporate purposes. POSCO Holdings Inc.’s (PKX - Free Report) subsidiary POSCO International Corporation has issued its first-ever global bond, raising $500 million in a five-year offering and marking its debut in the international capital markets. 

The single-tranche bond was priced at 90 basis points over the five-year U.S. Treasury yield, tightening 30 basis points from the initial price guidance after attracting strong investor demand. The offering was four times oversubscribed, with total orders reaching approximately $2 billion, despite heightened volatility in global financial markets stemming from recent geopolitical tensions in the Middle East. 

POSCO conducted investor presentations and conference calls with major institutional investors across the United States, Europe and Asia before the issuance. The company highlighted its diversified portfolio spanning energy, materials and agro businesses, its stable earnings base and its position as a core affiliate of the POSCO Group. Investors also showed strong interest in the company's growth strategy, including the expansion of Senex Energy's LNG production capacity in Australia and the continued growth of its Indonesian palm oil subsidiary, PT PAR. 

The proceeds from the bond issuance will be used to repay existing foreign-currency borrowings and for general corporate purposes, thereby strengthening the company's funding flexibility. 

Asian investors accounted for 67% of allocations, followed by the United States at 27% and Europe at 6%. By investor type, asset managers represented 65%, banks 33% and other investors 2%.  

The transaction was jointly managed by BNP Paribas, Citi, Crédit Agricole, HSBC, Mizuho and Korea Development Bank. The U.S. dollar bonds received investment-grade ratings of BBB from S&P and Baa2 from Moody's. 

POSCO said the successful issuance reflects global investors' recognition of its business competitiveness and long-term growth potential. The company plans to further diversify its funding sources, expand its overseas investor base and strengthen its growth platform across its energy, materials and agro businesses. 

Shares of PKX have lost 12.2% in the past year compared with the industry’s 10.4% decline. 

Image Source: Zacks Investment Research

PKX Zacks Rank & Key PicksPKX currently carries a Zacks Rank #3 (Hold). 

Some better-ranked stocks in the Conglomerates space are GPGI, Inc. (GPGI - Free Report) , Marubeni Corporation (MARUY - Free Report)  and Griffon Corporation (GFF - Free Report) . GPGI, MARUY and GFF carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for GPGI’s current-year earnings is pegged at 95 cents per share, indicating a 4% year-over-year decrease. Its earnings beat the Zacks Consensus Estimate in the last two quarters, with the average earnings surprise being 25.6%. 

The Zacks Consensus Estimate for MARUY’s current-year earnings is pegged at $23.86 per share, indicating an 8.8% year-over-year decrease. Shares of MARUY have gained 48.7% over the past year. 

The Zacks Consensus Estimate for GFF’s current fiscal-year earnings is pegged at $5.17 per share. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with the average earnings surprise being 3.3%.