POSCO Holdings Gains as Steel Business Recovers and Lithium Unit Posts First-Ever Profit

POSCO Holdings shares advanced on September 1 as investors responded to improving fundamentals across the group's two main pillars: traditional steelmaking and battery materials. The stock closed at 340,100 won on the Korea Exchange, up 0.74% from the previous session, extending a recent run of gains tied to expectations of a broader profit recovery.

The most notable development was in the company's lithium business, a cornerstone of POSCO's push to diversify beyond steel into battery materials for electric vehicles. According to the report, the lithium operation recorded a profit for the first time, a milestone that analysts see as validating years of heavy investment in refining capacity, including projects tied to South American brine sources and domestic processing facilities.

At the same time, POSCO's core steel business is showing clearer signs of a turnaround after a prolonged stretch of weak margins caused by soft global demand and oversupply pressures, particularly from Chinese producers. Improving price spreads and firmer shipment volumes have helped restore profitability at the group's flagship steel operations.

Earnings estimates compiled through Hankyung's AI-based consensus tool point to a sharp rebound in profitability. Operating profit for the third quarter of this year is projected at 818 billion won, a 28.1% increase from the same period last year. For the full year, operating profit is forecast to reach 3.943 trillion won, up 69.4% from the prior year, reflecting the combined boost from steel and lithium.

Market watchers say the twin recovery has reinforced the view that POSCO Holdings has been trading below its intrinsic value, with the earnings turnaround seen as a catalyst for a potential re-rating of the stock. The improving outlook for both legacy and new-growth businesses is being read as evidence that the conglomerate's long-term diversification strategy is beginning to bear fruit.

Investors will be watching the company's upcoming quarterly results for confirmation of these trends, particularly whether the lithium unit can sustain profitability as battery material prices and EV demand fluctuate globally. Continued strength in steel margins will also be a key factor in determining whether the current rally has further room to run.