S. Korea's Posco readies to command LNG tank materials market

South Korea’s top steelmaker Posco is moving fast to take the lead in the liquefied natural gas (LNG)-fuel tank materials market as global demand for the environmentally-friendly vessels is growing steadily under tightened regulations.

According to sources from the steel industry on Wednesday, Posco is readying to expand steel supply for fuel tanks in LNG vessels on expectations that the LNG fuel tank market will grow rapidly next year in line with a surge in demand for LNG in the next five years.

Posco Research Institute forecast a total 130 trillion won ($119.8 billion) worth of LNG-fueled vessels would be built globally in 2025, more than six times that of 20 trillion won this year. The institute also estimated that there will be about 2,500 to 3,000 vessel orders by 2029 and by 2030, 60 percent of constructed vessels at home would be LNG-fueled ships.

An unnamed official from Posco said that it expects significant growth in LNG demand and the company will focus on LNG fuel tank materials.

Posco’s mainstay LNG fuel tank materials include 9% nickel steel – the most commonly sought steel grade for LNG fuel tanks that boasts high durability. The steel is known to withstand even in a minus 163 degrees Celsius environment.

Earlier this month, Posco supplied 9% nickel steel for the world’s first LNG-fueled bulk vessel built by Hyundai Samho Heavy Industries.

Posco also signed a memorandum of understanding with Korea’s Ministry of Maritime Affairs and Fisheries, H-Line Shipping, and Korea Gas Corporation in 2018 to supply fuel tank materials for green LNG-fueled ships.

High-manganese steel independently developed by Posco has also emerged as a good alternative to existing LNG fuel tank materials thanks to its competitive price against nickel due to its abundant reserve and comparably high quality.

Posco launched research on high-manganese steel in 2008 and completed the development of its mass production technology in 2013.

Under International Maritime Organization regulations, only four LNG fuel tank raw materials were allowed to be supplied for use – nickel alloy steel, stainless steel, 9% nickel steel, and aluminum alloy. Two years ago, the organization added high-manganese steel to the list.

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