POSCO Holdings Inc. PKX has effectively localized the manufacturing technique for electrode rods, which are considered a critical element in the steel production process.
Electrode rods are high-value-added carbon materials used in electric furnaces to melt steel scrap into molten iron or in refining procedures to eliminate impurities from blast furnace-produced molten iron. These rods convert electrical energy into thermal energy. The wider the diameter and electrode density, the higher the power output, which helps improve production efficiency.
With the increasing emphasis on ESG management in the global steel market, interest in electric furnace operations that emit less carbon than traditional blast furnaces has risen significantly. This transition has resulted in a steady increase in demand for high-density electrode rods.
POSCO Future M's successful localization of production technology for 300mm diameter high-quality UHP (Ultra High Power) electrode rods is projected to boost the competitiveness of the domestic steel sector.
POSCO Future M, in particular, is expected to significantly contribute to stabilizing the domestic steel industry's production system by localizing electrode rod manufacturing technology using needle coke derived from coal tar, a byproduct of POSCO's steelmaking process. This is important given the expanding export controls on critical raw materials across various countries.
PKX Stock’s Price Performance
In the past year, shares of PKX have lost 47.6% compared with the industry’s 25.8% decline.
Image Source: Zacks Investment Research
PKX’s Zacks Rank & Key Picks
PKX currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, Sylvamo Corporation SLVM and ATI Inc. ATI.
Carpenter Technology currently sports a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 14.1%. The company's shares have soared 175.9% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
Sylvamo, which currently carries a Zacks Rank #2 (Buy), beat the consensus estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 16.7%, on average. SLVM’s shares have rallied 64.6% over the past year.
ATI, currently carrying a Zacks Rank #2, beat the consensus estimate in three of the last four quarters and missing once, with the average earnings surprise being 3.7%. ATI has gained around 30.2% in the past year.
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