#IXR
#IXR
#IXR
POSCO INTERNATIONAL Establishes ‘China Excluded’ Supply Chain for Rare Earth Magnets2024/03/18
Its U.S. subsidiary secures a KRW 900 billion order from a North American global automaker to supply permanent magnets for six yearsIts German subsidiary sets to supply permanent magnets worth KRW 260 billion to a European automaker over nine years Partnered with a Korean company for the production of permanent magnets using rare earths not from China to diversify the supply chainPOSCO INTERNATIONAL (CEO Lee Kye-In) has successfully secured large-scale orders through its overseas subsidiaries, building a supply chain for rare earth magnets without Chinese sources.
The U.S. subsidiary of POSCO INTERNATIONAL recently secured an order worth approximately KRW 900 billion from a North American global automaker to supply permanent magnets from 2026 to 2031.
These permanent magnets will be used for the traction motors of the client’s new medium and large-sized electric vehicle (EV) models.
Furthermore, the German subsidiary of POSCO INTERNATIONAL has signed a contract to supply permanent magnets valued at approximately KRW 260 billion to a premium European automaker from 2025 to 2034.
The permanent magnets involved in these contracts secured by the overseas subsidiaries will be sourced from the U.S., Australia, and Vietnam while avoiding the use of rare earths from China. The production of these permanent magnets will be undertaken by STAR GROUP IND. CO., LTD., the sole manufacturer of rare earth permanent magnets in Korea.
Rare earth permanent magnets are a type of magnet crucial for the traction motor―the heart of an EV. They are used in over 80% of EV traction motors because their magnetic force is several times or up to dozens of times stronger than that of ordinary magnets.
These permanent magnet orders secured by the overseas subsidiaries of POSCO INTERNATIONAL hold significant value for the company. Not only are they viewed as a milestone in ‘expanding its stable mobility business through large-scale orders,’ but also as a step towards establishing a supply chain for the permanent magnet market that excludes China, a market where Chinese rare earths market share is at least 90 percent.
In addition to these permanent magnet orders, the company will expand its value chain to strengthen its position as a core part manufacturer for the drive control system of eco-friendly vehicles. Furthermore, the company will package and supply all the parts required for the rotor and stator of the traction motor core―key components of the electric vehicle drive control system―to both domestic and international automakers.
* The rotor contains permanent magnets that generate the necessary magnetism for rotation in addition to the shaft that handles rotation. The stator is the component that surrounds the rotor from the outside.
“These orders mark a significant milestone as we enter the global market by collaborating with a domestic company in the rare earth permanent magnet market, which is largely monopolized by China,” remarked a POSCO INTERNATIONAL official. “We are currently in discussions with several automakers and traction motor manufacturers for additional orders and are optimistic about future business expansion.”
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