POSCO Holdings Inc., the mother or father of South Korea’s high steelmaker POSCO, has signed a strategic partnership with Cleveland-Cliffs Inc., the No. 2 US metal producer, as a part of efforts to increase its presence within the US to blunt the influence of revived Trump-era tariffs on imported metal.
With the partnership, the Korean metal conglomerate is predicted to take a position greater than 1 trillion received, or over $700 million, to accumulate not less than a ten% stake within the US steelmaker by subsequent 12 months, based on individuals aware of the matter on Friday.
The transfer mirrors Nippon Metal Corp.’s acquisition of US Metal Corp. as POSCO seeks to show the tariff regime into a possibility to localize manufacturing contained in the world’s most protected metal market, analysts mentioned.
Cleveland-Cliffs mentioned in an announcement that it signed a memorandum of understanding with POSCO Holdings on Sept. 17, aimed toward increasing cooperation within the US.
The 2 firms didn’t disclose particulars of the settlement, however the Ohio-based steelmaker mentioned the tie-up would enable POSCO to “increase its buyer base within the US whereas making certain its merchandise meet US commerce and origin necessities.”
“We’re aligned in our imaginative and prescient for a stronger, self-reliant and mutually useful industrial base throughout each nations. We sit up for welcoming POSCO to the Cleveland-Cliffs household and leveraging the mixed sources and strengths of each firms,” Celso Goncalves, Cleveland-Cliffs govt vp and chief monetary officer, mentioned within the press launch.
FINAL DEAL BY EARLY 2026
Cleveland-Cliffs expects to signal a ultimate settlement later this 12 months or in early 2026.
Headquartered in Cleveland, Ohio, Cleveland-Cliffs is the second-largest crude metal producer within the US, with an annual output of about 17.3 million tons.
Its operations span from iron ore mining to automotive-grade metal, making it one of many few totally built-in steelmakers in North America.
Beneath the partnership, POSCO goals to safe a direct provide of “US-made metal” that may be offered to its current US purchasers with out triggering the US Part 232 tariffs of as much as 50%.
The partnership may even assist the Korean firm meet US-origin guidelines vital for its automaking clients and infrastructure companions.
“We sit up for supplying our present clients with American-made metal by this partnership and sustaining the trusted relationships we now have established within the US,” mentioned POSCO Holdings Chief Government Lee Ju-tae.
CHAIRMAN CHANG’S ‘TWO-TRACK APPROACH’
The transfer marks a significant step in POSCO Group Chairman Chang In-hwa’s technique to counter the Trump administration’s protectionist insurance policies with a “two-track” strategy – combining native manufacturing by a deliberate joint metal mill with Hyundai Metal Co. in Louisiana and strategic alliances with current US producers.
Hyundai Metal’s $5.8 billion Donaldsonville, Louisiana, plant, targeted on superior automotive metal, is slated to start operations in 2029.
By investing in Cleveland-Cliffs, POSCO would achieve instant entry to US-made metal with out ready for the brand new Louisiana services to come back on-line.
Trade officers mentioned POSCO’s strategic partnership with Cleveland-Cliffs may additionally function a basis for a broader “Okay-Metal Alliance,” aligning Korean and US provide chains in vital industrial sectors.
Cleveland-Cliffs produces high-grade automotive and electrical metal and heavy plate used within the vitality and protection sectors – supplies anticipated to be in robust demand underneath the “Make American Shipbuilding Nice Once more (MASGA)” venture, a Korean initiative aimed toward revitalizing the US shipbuilding business.
ENOUGH CASH TO PURSUE STAKE PURCHASE
For POSCO, the partnership pairs its superior steelmaking and inexperienced know-how experience with Cleveland-Cliffs’ vertically built-in manufacturing system – spanning from mining to ultimate merchandise – creating what business officers name a “mine-to-market” worth chain.
POSCO seems financially outfitted to pursue a stake acquisition.
As of the top of June, the group held 6.6 trillion received in money and money equivalents and generated about 400 billion received by current divestments of low-yield belongings.
It plans to free a further 1.2 trillion received by 2027 by ongoing portfolio restructuring.
“The Trump tariff regime has turn into the brand new regular,” mentioned a Seoul-based metal business analyst. “POSCO’s funding in Cleveland-Cliffs exhibits it’s adapting sooner than any Asian rival, utilizing localization as its approach to keep contained in the US’ partitions.”
