24-06-2025
Posco International leads Korean traders' pivot from brokerage to energy value chains
Marking the 50th anniversary of the General Trading Company Designation System, Korean trading companies are accelerating efforts to upgrade their business models beyond traditional trade brokerage, expanding into full-cycle energy value chains spanning development, transportation, processing and sales.
As part of the nation's major export push during the economic growth era of the 1960s and 1970s, a total of 13 companies were designated as 'general trading companies' and granted government tax and financial support. The designation system was abolished in 2009, as their role diminished with large conglomerates building their own overseas sales networks.
In response, trading companies began transforming their business models, reducing reliance on traditional trading and expanding into new sectors such as resources and energy. Posco International, the trading and energy arm of steel giant Posco Group, stands at the forefront of this shift.
Posco International has restructured its business portfolio around three sectors: energy, agro-resources and secondary battery materials.
Rather than focusing on trade brokerage-based revenue, the company has built end-to-end value chains in each sector, aiming for greater operational control and long-term resilience.
In 2024, its posted 32.34 trillion won ($23.7 billion) in revenue and 1.12 trillion won in operating profit, nearly 70 percent of which came from its three strategic sectors.
The company maintained its momentum into the first quarter of 2025, with operating profit reaching 270.2 billion won, roughly half of which came from the energy sector.
The energy business, now vertically integrated following a merger with Posco Energy in 2023, covers the full liquefied natural gas value chain.
This includes upstream operations in Myanmar and Australia, stable LNG procurement through long-term supply deals with US-based Cheniere Energy, and the use of dedicated LNG carriers. The company's Gwangyang LNG terminal is undergoing expansion to raise total storage capacity to 1.33 million kiloliters.
In agro-resources, the company focuses on both efficiency and sustainability. Its Indonesian palm oil subsidiary, PT. BIA, operates under the Roundtable on Sustainable Palm Oil certification and uses AI-powered smart farming systems.
A joint project with GS Caltex, a Korean energy and chemicals company, is expected to complete a 500,000-ton biofuel plant in East Kalimantan this year, enabling the production of next-generation fuels such as sustainable aviation fuel.
Posco International has also built a vertically integrated supply network in coordination with other Posco companies in the battery materials business.
It holds a stake in the Mahenge mine in Tanzania, providing natural graphite for Posco Future M, its sister firm specializing in producing battery materials, and other affiliates within the group.
By securing key upstream assets and consolidating operations, the company aims to buffer against external shocks, including commodity price volatility and geopolitical risks.
"Posco International's pivot toward cash flow-oriented businesses marks a structural shift," said Shinhan Investment Analyst Park Kwang-rae. "It reflects a broader trend in Korea's trading sector toward greater value-chain integration and risk management."
