GWANGYANG, South Jeolla Province — Caught in the crosshairs of protectionism, South Korean steel giant Posco faces the heat of US President Donald Trump’s 25 percent steel tariffs, which are set to go into effect March 12.

But Posco’s is still forging new paths at Gwangyang Steelworks, where it is making its patented high-manganese steel, an alloy built to withstand extreme cryogenic temperatures.

Engineered for durable, cost-effective liquefied natural gas storage, HMS is now in use just a few kilometers away, where the company's latest LNG tank is taking shape.

“This facility, using HMS, underscores Posco’s ambitions in what could redefine the LNG industry,” said an official from Posco International, the group's trading and energy arm. "It stands as a testament to the company’s technological prowess and a key pillar in the LNG value chain."

The company made a breakthrough in 2008, when Posco, responding to tightening environmental regulations and rising LNG demand, set out to develop a cost-effective alternative to 9 percent nickel steel -- an essential but costly material for LNG storage tanks.

“The result was a steel alloy with 22.5 to 25.5 percent manganese, a wear-resistant and non-magnetic material that remains durable at temperatures as low as minus 196 degrees Celsius,” said a company researcher during a briefing at the industrial complex in Gwangyang.

Leveraging its expertise in controlled rolling and cooling techniques, Posco brought the material to market in 2013, offering a 30 percent cost advantage over nickel-based alternatives while ensuring a more stable supply amid fluctuating nickel prices and geopolitical tensions.

Following nearly a decade of industry certifications — including registration with the American Society for Testing and Materials in 2017, full approval from the International Maritime Organization in 2022, and recognition by the American Petroleum Institute in 2023 — Posco cleared the way for HMS exports to the global market.

In a world first, a commercial LNG-fueled vessel was equipped with fuel tanks made with HMS in 2017. By 2022, the technology had been integrated into very large crude carriers (VLCCs), and by 2024, container ships joined the growing list of vessels using the alloy.

In his New Year's address, Posco Group Chairman Chang In-hwa called for intra-group efforts to adapt to the shifting global energy landscape.

"We should maximize synergies by strengthening connections across the value chain to boost profitability," the chairman said.

The steelmaker’s proprietary HMS technology plays a key part in that effort, as Posco builds up its LNG-related operations.

Posco's LNG terminal is the core of its energy infrastructure, bridging the group's oil and gas resource development and LNG power generation with storage and distribution.

Posco’s first LNG terminal in Gwangyang consists of six tanks, with the fifth and sixth clad in HMS. The alloy is also being used in the seventh and eighth tanks currently under construction at the site of the second terminal.

“Combined with the first terminal's 930,000-kiloliter storage capacity, the expansion will bring total capacity to 1.33 million kiloliters by 2026 -- enough to supply 40 days of nationwide heating gas consumption,” said a company engineer at the construction site.

Beyond storage, Posco’s LNG operations extend to vessel commissioning services for shipbuilders and LNG bunkering, the process of supplying LNG to ships at sea or in port.

The group's LNG strategy comes amid seismic changes in global energy markets. LNG remains a critical transition fuel, with a lower environmental footprint than coal or oil, and potentially paves the way toward using more hydrogen and renewable energy.

According to British oil and gas giant Shell, LNG demand is projected to rise 60 percent by 2040, driven in part by economic growth in Asia. Other curveballs in the global energy game, according to Posco, include disrupted gas supply routes and the explosive growth of AI-driven data centers.

In line with the trend toward increased demand, Posco has locked in long-term contracts to import 1.1 million metric tons of North American LNG annually for two decades — a deal made in 2024 for 700,000 tons from Mexico Pacific and in 2022 for 400,000 tons from Cheniere Energy.

“These long-term contracts prove Posco International’s credibility as a global energy player — something we can take pride in,” said a company official. “They also bolster our strategic position amid pressures from the Trump administration, giving us greater negotiating power.”