Driven by the growth in the defense and rocket markets, South Korean steel giants like SeAH and Poongsan, known as "strong players in specialty alloys," are actively expanding their investments. The emergence of private space companies such as SpaceX and Blue Origin is further fueling the specialty alloy market, with demand projected to nearly double over the next five years. Specialty alloys are high-value-added products, commanding operating profit margins of 20% or more, six times higher than general steel products, due to their difficult manufacturing process. The global specialty alloy market is expected to reach approximately 22 trillion KRW by 2031.
SeAH Besteel Holdings is planning to commission its specialty alloy plant in Texas, USA, built with a 210 billion KRW investment last year, in the second half of next year. This plant will supply approximately 6,000 tons of specialty alloys annually to American companies. SeAH aims for over 1 trillion KRW in sales and 200 billion KRW in operating profit from this single facility. The US market, which accounts for half of the global specialty alloy demand and leads the defense and aerospace sectors, underscores the strategic importance of SeAH's local investment. Specialty alloys are essential for cutting-edge industries including the latest fighter jets, spacecraft, nuclear power generation, and gas turbines for Small Modular Reactors (SMRs).
Poongsan is also exploring business expansion based on its specialty alloy material production technology, reviewing an increase in technology investment to expand into areas like nickel-cobalt superalloys. Among small and medium-sized enterprises, HVM is constructing a second plant with a capacity of 15,000 tons, a sixfold increase from its current production scale.
Industry speculation suggests that the rapid growth of the specialty alloy market might prompt POSCO, which sold POSCO Specialty Steel in 2014, to re-enter the market. As the high-profit specialty alloy sector garners attention amidst broader restructuring discussions in the steel industry, it is highly likely that more steel companies will emerge, seeking to cultivate this segment.
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