Why Did POSCO Holdings’ Earnings Improve? Lithium, LNG, and Steel in Q2 2026 [EN]
COMPANY ANALYSIS
POSCO Holdings’ second-quarter 2026 results improved not because of a powerful rebound in steel alone, but because several factors came together: higher steel selling prices and volumes, a return to profit in battery materials including lithium, and strong energy and palm-oil results at POSCO International. Consolidated revenue rose to KRW 19.259 trillion and operating profit to KRW 819 billion from the previous quarter. Still, net profit included a gain from selling stakes in overseas steel units, while some materials businesses benefited from inventory valuation effects. That means not all of the profit should be treated as recurring.
- Consolidated revenue
- KRW 19.259tn
- Up KRW 1.383tn from the previous quarter
- Operating profit
- KRW 819bn
- Up KRW 112bn from the previous quarter
- Operating margin
- 4.3%
- Up 0.3 percentage points from the previous quarter
How Much Did POSCO Holdings’ Second-Quarter 2026 Results Improve?
POSCO Holdings reported second-quarter consolidated revenue of KRW 19.259 trillion, operating profit of KRW 819 billion, and net profit of KRW 761 billion on July 30, 2026. Compared with the previous quarter, revenue increased by KRW 1.383 trillion, operating profit by KRW 112 billion, and net profit by KRW 218 billion.
| Item | Q2 2025 | Q1 2026 | Q2 2026 | Quarter-over-quarter change |
|---|---|---|---|---|
| Revenue | 175,560 | 178,760 | 192,590 | +13,830 |
| Operating profit | 6,070 | 7,070 | 8,190 | +1,120 |
| Operating margin | 3.5 | 4.0 | 4.3 | +0.3%p |
| Net profit | 840 | 5,430 | 7,610 | +2,180 |
Source: POSCO Holdings’ second-quarter 2026 earnings materials. Segment figures are shown before the elimination of intercompany transactions, so their simple sum may not match consolidated results.
Both revenue and profit improved. But the operating margin was 4.3%, meaning the core business generated about KRW 4.30 in operating profit for every KRW 100 in sales. The direction improved, but profitability is not yet high enough to call it a dramatic turnaround.
Why Did the Steel Business Improve?
Second-quarter operating profit in steel was KRW 403 billion, up KRW 58 billion from KRW 345 billion in the previous quarter. Within that total, operating profit at POSCO, the group’s Korean steelmaking unit, rose by KRW 61 billion from KRW 213 billion to KRW 274 billion.
The first reason was pricing. POSCO’s disclosed average selling price for carbon steel rose by KRW 42,000 per metric ton, from KRW 920,000 in the first quarter of 2026 to KRW 962,000 in the second. The second reason was higher production and sales volume. Selling more steel at higher prices helped absorb some of the increase in raw-material and logistics costs.
That does not mean cost pressure disappeared. The company’s index of major raw-material costs rose 6% from the previous quarter, while higher oil prices pushed up logistics and equipment-maintenance expenses. POSCO’s operating margin improved from 2.4% to 2.9%, but the gain could narrow if raw-material and energy costs rise again or the company cannot raise product prices.
| Factor | Second-quarter change | Effect on operating profit |
|---|---|---|
| Carbon-steel selling price | KRW 920,000 → KRW 962,000 per metric ton | Positive |
| Production and sales volume | Higher than the previous quarter | Positive |
| Major raw-material cost index | Up 6% from the previous quarter | Negative |
| Oil, logistics, and maintenance costs | Higher cost burden | Negative |
Put simply, steel did not improve because costs fell. Profit increased because selling prices and volumes moved more favorably even as costs rose.
Did Lithium and Battery Materials Actually Turn Profitable?
The group’s battery-materials segment moved from an operating loss of KRW 7 billion in the first quarter of 2026 to an operating profit of KRW 41 billion in the second. But this does not mean every lithium affiliate became profitable. The results varied clearly by company.
| Company or segment | Q1 2026 | Q2 2026 | What it means |
|---|---|---|---|
| Battery-materials segment | -70 | 410 | The segment as a whole turned profitable |
| POSCO Future M | 180 | 270 | Profitability improved |
| POSCO Argentina | -180 | 110 | First quarterly operating profit |
| POSCO Pilbara Lithium Solution | -30 | -10 | Loss narrowed, but the business did not turn profitable |
Figures use the KRW 100 million amounts shown in POSCO Holdings’ earnings materials. Detailed totals may differ because of rounding.
Why Did POSCO Argentina Turn Profitable?
POSCO Argentina improved equipment and stabilized operations at its first brine-lithium plant, lifting second-quarter revenue by KRW 80 billion from the previous quarter. Its operating result swung from a KRW 18 billion loss to a KRW 11 billion profit. A plant with low utilization can struggle to cover fixed costs at first, but as production and sales rise, those costs are spread across more units.
The second plant, however, is still undergoing trial runs ahead of a planned October 2026 completion. Startup and preparation costs may come first during the early stages of expansion, so one profitable quarter does not yet prove the business has reached stable long-term profitability.
Why Did POSCO Future M’s Profit Rise Even as Revenue Fell?
POSCO Future M’s revenue declined from KRW 758 billion in the first quarter to KRW 680 billion in the second, but operating profit increased from KRW 18 billion to KRW 27 billion. Some cathode-material sales were delayed, but changes in raw-material prices produced a favorable inventory valuation effect. Anode-material profitability also improved as sales to major customers recovered. In the basic-materials business, higher prices and sales volumes for oil-linked chemical products lifted profit.
How Much Did LNG and Infrastructure Contribute?
Second-quarter operating profit in infrastructure reached KRW 493 billion, up KRW 88 billion from the previous quarter. POSCO International was at the center of the improvement. Its operating profit increased by KRW 71 billion from KRW 358 billion to a quarterly record of KRW 429 billion.
POSCO International’s energy business includes gas-field development and production, LNG power generation, and terminals. Second-quarter energy operating profit rose by KRW 53 billion from KRW 173 billion to KRW 226 billion. The main drivers were selling-price and exchange-rate effects at the Myanmar gas field and higher production at Australia’s Senex gas fields.
Operating profit from other businesses, including steel and materials, also increased from KRW 185 billion to KRW 203 billion. Production in the Indonesian palm-oil business recovered after bad weather reduced output in the first quarter, while the trading arm used its LNG-trading capabilities to improve profitability.
Does the KRW 761 Billion Net Profit Fully Reflect the Core Business?
Not entirely. Second-quarter net profit included KRW 392 billion from selling stakes in Zhangjiagang Pohang Stainless Steel and Qingdao Pohang Stainless Steel in China. It also reflected items moving in the opposite direction, including a KRW 112 billion impairment loss related to the closure of POSCO’s No. 2 FINEX facility.
Asset sales can be meaningful because they raise cash and streamline the business portfolio. But the same asset cannot be sold every quarter. To judge how much the core business improved, it is better to look first at operating profit, operating margin, and operating results by segment rather than focusing only on the growth rate in net profit.
The company said it had raised a cumulative KRW 2.2 trillion in cash through 85 restructurings of non-core and low-return businesses from 2024 through the first half of 2026. It also raised its target to 129 cases and KRW 3.5 trillion in cumulative cash by 2028. Restructuring can strengthen financial flexibility, but long-term corporate value ultimately depends on the earnings and cash flow of the core businesses that remain.
What Changed in This Quarter’s Results?
POSCO Holdings is no longer a group whose results can be explained by the steel cycle alone. In the second quarter, steel maintained the group’s base level of profit, lithium and battery materials reduced the drag from losses, and energy businesses including gas fields and LNG added to profit growth.
| Business | Role this quarter | Key driver for the next results |
|---|---|---|
| Steel | The group’s base earnings engine | The spread between product prices and raw-material and energy costs |
| Lithium and battery materials | Smaller losses and a return to profit | Lithium prices, sales volumes, utilization, and inventory valuation |
| Gas fields and LNG | Higher infrastructure profit | Selling prices, production, exchange rates, and trading margins |
| Portfolio restructuring | Cash generation and support for net profit | Core-business cash generation after one-off effects |
In simple terms, a downturn in steel used to shake the entire group more severely. This quarter, other businesses absorbed some of the impact. Still, one quarter of simultaneous improvement is not enough to declare the diversification strategy complete.
What Will Determine Whether the Improvement Continues?
Are Steel Selling Prices Moving Faster Than Raw-Material Costs?
Steel profit comes from the spread between product selling prices and the cost of iron ore, coking coal, energy, and logistics. Higher prices and volumes outweighed rising costs in the second quarter, but operating profit could fall again if that relationship reverses. Low-priced Chinese steel, tariffs and import restrictions around the world, and demand from the auto, shipbuilding, and construction industries also need to be watched.
Can Lithium Stay Profitable Without Help From Pricing?
Stable production and higher sales at POSCO Argentina are encouraging. But ore-based lithium affiliates depend on the spread between raw-ore purchase costs and lithium-hydroxide selling prices, while brine-based operations depend more on new-plant utilization and startup costs. That is why the group’s lithium profit cannot be forecast using “higher lithium prices” alone.
Will POSCO Future M’s Volumes and Margins Recover Together?
Profit increased in the second quarter even though revenue declined. The next step is to see whether cathode- and anode-material shipments, plant utilization, and product margins all improve alongside any inventory valuation effects. That will provide a better test of whether the profit is sustainable.
Can the Energy Business Repeat Its Strong Profit?
Gas-field profit depends not only on production but also on international energy prices, sales contracts, and exchange rates. The palm-oil business can also swing sharply from quarter to quarter with prices and crop conditions. Rather than treating POSCO International’s record quarterly operating profit as the automatic starting point for the next quarter, investors should check volumes and prices in each business again.
Will Heavy Investment Become a Financial Burden?
POSCO Holdings’ consolidated capital expenditure totaled KRW 3.7 trillion in the first half of 2026. Net debt reached KRW 16.106 trillion at the end of the second quarter, up KRW 742 billion from the previous quarter, while the net debt ratio rose from 24.2% to 25.1%. Until investments in lithium, low-carbon steel, and new resources start producing future earnings, cash flow and debt management will remain important.
- Changes in POSCO’s steel selling prices, sales volume, and major raw-material costs
- Whether POSCO Argentina’s first plant stays profitable and the startup costs of its second plant
- Whether POSCO Pilbara Lithium Solution turns profitable
- POSCO Future M’s shipments and profitability excluding inventory valuation effects
- POSCO International’s gas-field production and energy operating profit
- Changes in operating cash flow, capital expenditure, and the net debt ratio
POSCO Holdings Second-Quarter 2026 Earnings FAQ
What Was the Biggest Reason POSCO Holdings’ Operating Profit Increased?
The simultaneous improvement in three segments mattered more than any single factor. Steel benefited from pricing and volume, battery materials from POSCO Argentina’s return to profit and better profitability at POSCO Future M, and infrastructure from strong energy and palm-oil results at POSCO International.
Are All of POSCO Holdings’ Lithium Businesses Profitable?
No. POSCO Argentina recorded its first quarterly operating profit in the second quarter, but POSCO Pilbara Lithium Solution only narrowed its operating loss from KRW 3 billion to KRW 1 billion. The lithium business needs to be assessed affiliate by affiliate.
Did LNG Alone Improve POSCO International’s Results?
No. The energy business—including gas fields in Myanmar and Australia, LNG power generation, terminals, and trading—improved alongside the Indonesian palm-oil business. The disclosed materials point in particular to gas-field pricing and exchange-rate effects and higher Australian production.
Can We Expect the Same Net Profit Next Quarter?
That cannot be assumed. Second-quarter net profit included a KRW 392 billion gain from selling stakes in overseas steel units. Because the same disposal gain may not recur next quarter, operating profit and cash flow should be assessed separately.
Bottom Line: Results Improved, but the Quality of Earnings Matters
POSCO Holdings’ second-quarter 2026 results clearly improved from the previous quarter. Higher steel prices and volumes outweighed cost pressure, battery materials moved from loss to profit, and POSCO International posted record quarterly operating profit on the strength of its energy and palm-oil businesses.
But not every lithium affiliate was profitable. POSCO Future M benefited from inventory valuation effects, while net profit included gains from asset sales. Going forward, the question is not simply whether earnings increased, but whether steel margins, lithium-plant utilization, battery-material shipments, energy production, and net debt improve together.
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