POSCO Holdings Q3 2026: Steel Profit Jumps 66% While Lithium Slips Back Into the Red

POSCO Holdings, the holding company of South Korea's largest steelmaker, reported a preliminary third-quarter operating profit of 945 billion won (about $705 million) on November 2, 2026, up 47.9% from a year earlier and 15.3% from the previous quarter. The gain came almost entirely from steel. Its battery materials business, built around lithium, swung back to an operating loss.

All won figures below are converted at about 1,341 won per US dollar, the rate shown on the afternoon of November 2 (Korea time).

The headline numbers

On a consolidated basis, revenue was 19.14 trillion won (about $14.3 billion), down 0.6% from the second quarter. Operating profit rose to 945 billion won from 819 billion won, lifting the operating margin from 4.3% to 4.9%. Net profit was 380 billion won (about $283 million), roughly half of the second quarter's 761 billion won. The second quarter had been boosted by a one-off gain of 392 billion won from selling two stainless steel subsidiaries in China.

Quick definition: A holding company owns controlling stakes in other companies rather than running a single business. POSCO Holdings owns the steelmaker POSCO, the battery materials maker POSCO Future M and several lithium subsidiaries, and the trading and energy company POSCO International, among others. Its consolidated results include these businesses after consolidation adjustments.

Why steel bounced back

The core steel company, POSCO, earned an operating profit of 455 billion won (about $339 million) on a stand-alone basis, up 66% from 274 billion won in the second quarter. Its operating margin recovered from 2.9% to 4.6%.

According to the company, coking coal and other raw material costs rose, but POSCO was able to raise prices and sell more. The average selling price of its carbon steel went up by 20,000 won per ton, from 962,000 won to 982,000 won (about $15 more per ton). Product sales rose by 202,000 tons to 8.56 million tons, and plant utilization reached 90.9%.

POSCO broke down the change in profit as follows: higher selling prices added 180 billion won, higher production and sales added 56 billion won, and lower costs and other items added 159 billion won, while higher raw material prices took away 214 billion won. Including overseas mills, the steel segment as a whole earned 566 billion won, up from 403 billion won.

Why battery materials fell into a loss

The battery materials segment went from an operating profit of 41 billion won in the second quarter to an operating loss of 17 billion won (about $13 million) in the third. The company pointed to three things: lower lithium and metal prices, a stronger Korean won against the dollar, and a harsh winter at its lithium operation in Argentina. It also booked 29 billion won in inventory valuation losses.

POSCO Argentina, which produces lithium from a salt lake, swung to an 18 billion won loss after severe winter weather and a major repair of a drying unit temporarily cut output, while lithium prices also fell. POSCO Pilbara Lithium Solution, which makes lithium from mined ore, saw its loss widen to 67 billion won because raw ore remained expensive relative to selling prices. On the other hand, POSCO Future M, which makes cathode materials for batteries, raised its operating profit from 27 billion won to 82 billion won. That improvement was not enough to cover the lithium losses.

The infrastructure segment, which includes POSCO International and the construction arm POSCO E&C, held steady at 495 billion won. For the first nine months of 2026, consolidated operating profit came to 2.47 trillion won, up 36.2% from a year earlier.

The lithium plan

Lithium is a key raw material for electric vehicle battery cathodes. Lower lithium prices can put pressure on the revenue and profits of companies that produce it directly. POSCO Holdings is betting on lithium anyway.

On October 6, the company completed a second lithium plant at the Hombre Muerto salt flat in Argentina, with capacity for about 23,000 tons a year of high-purity lithium carbonate. Combined with the first plant, finished in 2024, and a processing link to its plant in Yulchon, South Korea, the company says it now has a production system of about 50,000 tons a year. From 2027, lithium carbonate from Argentina is to be converted into battery-grade lithium hydroxide in Yulchon.

The next step is a third and fourth phase. POSCO Holdings plans to reach 100,000 tons a year by 2033 and strengthen its position among the world's top five lithium suppliers. The company says an agreement signed with the provincial government on October 6 gives it a fast track for permits.

The balance sheet also improved. Net debt fell by 4.27 trillion won (about $3.2 billion) in three months to 11.84 trillion won, helped by 2.5 trillion won from selling stakes in listed affiliates and 0.7 trillion won from selling its stake in Woori Bank. The net debt ratio dropped from 25.1% to 18.4%.

How to read the quarter without mixing measures

The 47.9% increase compares group operating profit with the same quarter a year earlier. The 66% increase compares POSCO's stand-alone steel operating profit with the immediately preceding quarter. They describe different reporting boundaries and different comparison periods. Reading them as if they were two estimates of the same growth rate would obscure where the improvement occurred.

The margin change tells another part of the story. A consolidated operating margin of 4.9% means operating profit of roughly 4.9 won for each 100 won of revenue. It is higher than the previous quarter's 4.3%, even though revenue declined slightly. Net profit moved in the opposite direction because the earlier quarter included a large disposal gain. Operating performance, one-off gains and debt reduction are therefore best considered as separate layers of the earnings report.

Key takeaways

POSCO Holdings' preliminary third-quarter operating profit rose 48% to 945 billion won. Steel did the heavy lifting, with POSCO's profit up 66% on higher prices and volumes. Battery materials slipped into a 17 billion won loss as lithium prices, the stronger won and winter weather in Argentina weighed on results. With steel holding up the group for now, the next thing to watch is when the lithium business starts making money.

Source: POSCO Holdings