Korean steelmakers shift focus to high manganese steel production for growth

LNG tanks made of high manganese steel [Photo provided by POSCO]

South Korean steel manufacturers are scrambling to produce high manganese steel as demand for the environmentally-friendly steel product that can endure extremely low temperature grows in diverse industry sectors.

According to multiple industry sources on Tuesday, a growing number of Korean steel companies have started to produce high manganese steel, which in the past were supplied mainly by top POSCO. The type of steel has high durability at an extremely low temperature. It can also preserve liquefied natural gas (LNG) and liquid hydrogen without any heat loss, which explains why the material has emerged as a new material for LNG carriers and storage tanks.

LNG carriers, known as environmentally-friendly vessels in the industry, require extremely cryogenic storage systems to keep the gas below its extremely low boiling point. Korean steelmakers previously depended on the supply of LNG tanks made of high manganese steel from their international rivals but more companies are investing in LNG infrastructure as local production of the material has become available.

The steel and shipbuilding industries are using high manganese steel to strengthen their business cooperation. Hyundai Steel Co. has recently succeeded in manufacturing the cryogenic tension test equipment necessary for building LNG storage tanks. The steelmaker became equipped with the test facility a year after it won orders for cryogenic steel used for the construction of tanks at LNG terminals in Gwangyang and Dangjin last year. The latest success of developing the test facility will likely give a competitive edge to the steelmaker by enabling it to save costs and shorten the construction period.

Dongkuk Steel Mill Co. and SeAH Steel Corp. are also joining the government‘s initiatives for carbon neutrality in steel production, including a joint fund worth 150 billion won ($113.8 million).

High manganese steel has emerged as a green source across a broader cluster of steel, shipbuilding, and trade companies.

POSCO International Corp. and LX International Corp are expected to start constructing two LNG terminals with 270,000 kiloliters of storage capacity in Dangjin in the first half of the year. High manganese steel produced by POSCO will be used in the project. The two trading companies expanded their mineral mining businesses into the construction of eco-friendly LNG terminals.

“The industry is turning to low carbon carriers, such as LNG carriers, in which high durability and cryogenic storage systems are required,” said Lee Yun-hee, a researcher at POSCO Research Institute. “There is a growing need for advancing relevant technology because the shipment of liquid hydrogen, as well as LNG, also needs the tanks using special materials such as high manganese steel.”