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.
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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