Recently, POSCO, the largest steel manufacturer in South Korea, announced that it will cooperate with China's Qingshan Holdings Group to build a large-scale stainless steel production base in Indonesia. This significant cooperation not only reflects the determination of both sides to deepen strategic cooperation, but also highlights the new trend of the global stainless steel industry shifting to the Southeast Asian market.

According to the agreement reached by both parties, the two companies plan to build a stainless steel factory with an annual production capacity of 2 million tons in the Morowali Industrial Park on Sulawesi Island, Indonesia, which is equivalent to the total stainless steel production in South Korea. In terms of equity structure, POSCO will acquire 44.12% of PT Xinheng Metal Indonesia's shares from PT Makmur International Investment PTE, a subsidiary of Qing Shan Group, while Qing Shan will retain 55.88% of its shares. It is worth noting that both parties will jointly manage this joint venture and work together to promote the comprehensive construction process of the factory.

This major project is expected to start the construction phase as early as 2026. It is reported that Pohang Iron and Steel's investment in this project will exceed 1 trillion Korean won (approximately 708.3 million US dollars). This investment decision is in line with POSCO's recent strategic adjustment - in July 2025, the company just sold its stainless steel factory with an annual production capacity of 1.1 million tons in China to Qingshan Group, fully demonstrating its strategic intention to reposition Southeast Asia as a globally important stainless steel production center.

The reason why Indonesia has become an ideal location for cooperation between the two sides is mainly based on two advantages: on the one hand, with Indonesia relocating its capital to Nusantara and the rapid progress of infrastructure construction, the demand for stainless steel in the market continues to rise, and stainless steel is widely used in fields such as building exterior walls, industrial pipelines, and factory construction; On the other hand, Indonesia has the world's largest nickel resource reserves, and nickel is a key raw material for stainless steel production.

POSCO had already started its layout in Indonesia as early as 2013, and its important investment was the Krakatoa POSCO Integrated Steel Plant with an annual output of 3 million tons. Industry experts believe that the rapidly growing demand in the Indonesian market and its unique advantage in raw material supply make it the preferred location for POSCO to advance its global expansion strategy. The implementation of this cooperation project will not only reshape the global stainless steel industry pattern, but also inject new impetus into the industrial development of Southeast Asia. Editor/Yang Beihua