Chairman Kwon Oh-joon of POSCO.

World Steel Dynamics (WSD) named POSCO the world’s most competitive steel maker for the seventh year in a row, POSCO said recently.

The steel maker said WSD announced the list of the 37 most competitive steel makers in the world, with POSCO topping the list, at the 31st global strategic meeting of steel makers. In compiling the competitiveness index, WSD studies the key sectors of their operations, such as technology reform, cost competitiveness, health of their finance, and raw materials supply, among others. 

As of June 2015, WSD assessed 37 steelmakers around the world in 23 categories including production size, profitability, technological innovation, cost competitiveness, cost savings, financial stability and procurement.

WSD credited POSCO for efforts to improve core corporate competitiveness by increasing sales of value-added high-end products and engaging in technology-based solution marketing. Accordingly, POSCO received the highest points in four segments, including technological innovation and human resource management, and won the top mark of 7.91 points out of 10, standing atop the overall rankings.

American mini-mill steelmaker Nucor Corp. ranked second, and has enjoyed shale gas development privileges along with a recent recovery in the steel industry among developed nations. Japanese steelmakers Nippon Steel and Sumitomo Metal Corp. (NSSMC) came in third, with sales rising due to increased export competitiveness under Abenomics. South American steelmaker Gerdau came in fourth, and Russian steelmaker Severstal in fifth. Hyundai Steel ranked ninth this year again.

In the forum with a theme of “Just the Beginning,” the WSD projected that the global steel industry would continue at the current slow pace for some time, after reviewing the short-term steel market conditions from 2015 to 2017. However, the institution also added that the global steel industry could recover some momentum from 2017, along with the recovery of the global economy and the improvement in the raw materials market.

POSCO is returning to its roots and focusing on improving the quality of the steel it produces as a flood of cheap exports from China pushes prices to their lowest level since at least 2003. The company’s shares have slid for three straight quarters, and dropped 29 percent in the past year.

“POSCO previously tried to seek additional growth in non-steel businesses but the new CEO has scrapped that strategy and written his own by focusing on steel,” said Bang Min Jin, an analyst at Eugene Investment and Securities Co. “Because it’s what they know and do the best.”

The company’s drive to export its steelmaking technology, Finex, is an example of how it’s making an effort to concentrate on its core business, Bang added.

POSCO plans to reduce the number of its local units to 22 by 2017 from 42 in 2014, it said. It will cut overseas businesses to 117 from 167 now. The company has operations in markets from Germany to Argentina to Mongolia, according to its website. 

On Oct. 31, 2014, POSCO held an opening ceremony for the No. 4 hot strip rolling mill at its Gwangyang steel works which will churn out high-quality automotive steel sheets. At the ceremony, 200 visitors were in attendance including POSCO chairman Kwon Oh-joon and representatives from group companies and major suppliers.

The POSCO chairman, said in a celebratory speech, "With the completion of the fourth hot strip rolling mill in Gwangyang, we need to strengthen the competitive position of POSCO in the high-value auto steel sheet and high-functionality steel product market." 

The annual capacity of the No. 4 plant is 3.3 million tons, most of which will be supplied to automobile assembly plants overseas through POSCO's steel sheet supply network across the world.

A view of POSCO’s steel complex in Pohang.(Photos: POSCO)