[Click eStock] "POSCO Inter, 'Rare Earth Permanent Magnets' Mid- to Long-Term Growth"

Daishin Securities forecasted on the 13th that POSCO International's rare earth permanent magnet business will show growth in the mid to long term.

POSCO International announced that it signed a rare earth permanent magnet supply contract worth 1.16 trillion KRW the day before. It plans to supply a total of 900 billion KRW to its U.S. subsidiary from 2026 to 2031, and 260 billion KRW to its German subsidiary from next year until 2034.

The magnets supplied by POSCO International are all permanent magnets made based on non-China rare earth elements. Seongrim Advanced Industry, the only domestic neodymium permanent magnet manufacturer, imports rare earths from the U.S., Australia, Vietnam, and other countries to produce the products. POSCO International supplies these products to its customers.

Permanent magnets are essential components in electric motors. As eco-friendly investments such as electric vehicles and wind turbines expand, demand is expected to continue increasing in the long term. The U.S. Department of Energy (DOE) projected that the global demand for rare earth permanent magnets will be approximately 380,000 tons by 2030.

Additionally, POSCO International is reportedly planning to enter the rare earth trading business. This is interpreted as a strategy to replace the Chinese production share amid the growing trend of de-Chinaization due to the Inflation Reduction Act (IRA).

Lee Taehwan, a researcher at Daishin Securities, commented on POSCO International's permanent magnet business, stating, "They will adopt a strategy to package and supply parts necessary for eco-friendly mobility, such as shafts and reducers, linked to the existing motor core business." He added, "POSCO International is expanding its role and presence within the global eco-friendly vehicle value chain."

He also said, "POSCO International is improving profitability by restructuring its trading business to focus on products and clients that can yield high profitability (high margins). Based on its overseas network, it is transforming into a steadily growing business model by developing various businesses."

This content was produced with the assistance of AI translation services.