New 450,000-ton-per-year line to lift capacity to 3.6 million tons by 2028
Wider panels for growing SUV and RV market
Gwangyang to anchor next-generation auto-steel production
Low-carbon, high-grade output to expand
![Hot-dip galvanized steel sheets for automotive use produced at the continuous galvanizing line at Posco's Gwangyang steelworks. [Posco]](https://wimg.heraldcorp.com/news/cms/2026/09/08/news-p.v1.20260908.7bc82f33dda84c74b60124cf734b8be2_P1.png)
Posco is investing 480 billion won ($354 million) to expand its production capacity for hot-dip galvanized steel sheets used in automotive body panels — its first such capacity addition in nine years. The move is a strategic response to rising demand for wider steel panels as SUVs and recreational vehicles grow larger, and to automakers' increasing calls for low-carbon materials.
Posco held a groundbreaking ceremony Tuesday at its Gwangyang steelworks for the eighth continuous galvanizing line, known as 8CGL, with an annual capacity of 450,000 tons. Posco President Lee Hee-geun, Gwangyang Steelworks Chief Ko Jae-yun, Gwangyang Mayor Park Sung-hyun and other senior executives attended.
The company plans to invest about 480 billion won to build the eighth automotive outer-panel galvanizing line at the Gwangyang steelworks, with completion targeted for 2028. The last time Posco added such a line was in 2017. Once the new line comes online, the steelworks' cold-rolled hot-dip galvanizing capacity will rise from the current 3.15 million tons per year to 3.6 million tons.
The Gwangyang steelworks has built galvanizing lines in sequence since launching its first in 1988, followed by the second in 1991, the third in 1995, the fourth in 2000, the fifth in 2006, the sixth in 2012 and the seventh in 2017. The combined annual capacity of lines one through seven currently stands at 3.15 million tons; the addition of 8CGL will contribute a further 450,000 tons.
Including hot-rolled galvanizing lines used for construction materials, Posco's total hot-dip galvanizing capacity will expand to 4.95 million tons per year. The company operates hot-rolled continuous galvanizing lines with a combined annual capacity of 600,000 tons at Gwangyang and 750,000 tons at its Pohang steelworks. While the cold-rolled lines primarily process steel sheets into automotive outer panels, the hot-rolled lines coat hot-rolled steel with zinc for supply to the construction materials market.
Hot-dip galvanized steel sheets are produced by coating steel with zinc to prevent corrosion. Their superior surface quality, corrosion resistance and formability make them the material of choice for automotive body outer panels. As vehicles move upmarket, demand has grown steadily alongside rising expectations for exterior quality and durability.
The new facility will focus particularly on producing outer-panel materials. In line with the trend toward larger body sizes driven by SUVs and RVs, Posco plans to expand output of wide-format steel sheets for mid- to large-size vehicles. As body panels grow in size, the ability to produce consistently wide sheets with uniform surface quality becomes increasingly critical.
The line will also support low-carbon automotive steel production. The 8CGL is intended to serve as a processing hub that converts material from a new electric arc furnace Posco is building into high-grade automotive steel sheets.
To that end, the company will install ultra-high-temperature heat treatment equipment suited to electric furnace feedstock. The plan is to extend the use of electric furnace material — which generates less carbon than a blast furnace — to automotive outer panels, enabling Posco to meet global automakers' demand for low-carbon steel.
AI and robotics will also be integrated into the production line. Drawing on more than 30 years of operational data, Posco will analyze material conditions, process parameters and finished-product quality data in real time to automatically adjust equipment settings. The company aims to reduce quality variation and defect rates while improving overall production efficiency.
Hazardous tasks previously performed by workers will be automated as well. AI and robots will handle jobs such as removing impurities from molten zinc and collecting samples for quality checks. The initiative represents not only a productivity drive but also an AI transformation of manufacturing that prioritizes worker safety alongside output gains.
![An aerial view of the Gwangyang steelworks. [Posco]](https://wimg.heraldcorp.com/news/cms/2026/09/08/news-p.v1.20260720.3ac7fb5d24984fc2999d04b0fbd06eb2_P1.jpg)
The investment is part of Posco's broader strategy to develop the Gwangyang steelworks into a production hub for next-generation mobility steel. In July, Posco Group unveiled its "Triple Core" strategy, committing to strengthen competitiveness in high-value products, cut costs and transition to a low-carbon production model in its steel business.
As part of that effort, Posco has designated gigasteel and high-efficiency non-oriented electrical steel — used in electric vehicle drive motors — among its eight core strategic products. The company plans to develop Gwangyang into a concentrated production base for future-mobility steel, and with the 8CGL investment, aims to broaden its product lineup from automotive outer panels to EV motor steel.
After the 8CGL is completed, Posco intends to increase automotive steel output while also raising the share of premium outer-panel materials and low-carbon products to meet demand from global automakers.
"This investment is a strategic move to strengthen our future competitiveness amid a rapidly changing global steel landscape," Posco President Lee Hee-geun said. "By building a Posco-style specialized automotive steel facility capable of producing next-generation, high-quality automotive steel sheets with enhanced cost and technological competitiveness, we will further solidify Posco's technology leadership in the global arena."
kwater@heraldcorp.com
