Marine Economy Korea 9

POSCO Energy Steel & Solution

POSCO, on the strength of its timely innovations responding to the needs of end-user industries, is now steaming ahead with the development of new high-qualitysteel products designed for applications in extreme low temperature conditions andenvironments.

In particular, the value of POSCO's high manganese steel (high Mn steel), anadvanced product with a 25% increase in manganese content, is drawing attentionfrom domestic and global enterprises for its low thermal expansion, machinability andprocessability properties.

50-70% Cost Reduction Projected: Economic & Quality Benefits

In addition to excellent quality on par with other steel alloys such as SUS 304 andnickel steel, high Mn steel represents a 50-70% cost reduction compared withexisting cryogenic materials on account of materials price and construction expenses.

Moreover, according to the Journal of the Society of Naval Architecture of Korea, theultimate tensile strength of high Mn steel is comparable to existing cryogenic materialsbut is unmatched when welding is involved. The fatigue strength of high Mn steel atroom temperature is as good as other cryogenic materials, but in a cryogenicenvironment slightly lower than others, though higher than Al5083-O alloy.

Against this backdrop, POSCO's high Mn steel is expected to contribute significantlyto the competitiveness enhancement of end-user industries, including theshipbuilding and offshore plant sectors.

A Material Revolution Blooming LNG Renaissance

POSCO's High Manganese Steel

Marine Economy Korea10

POSCO Energy Steel & Solution

Value Network for Excellence of POSCO SteelTech & Korean Shipyard Leadership

POSCO's development of high manganese steel isthe fruit of the value network for the excellence ofPOSCO's steel technology and Korean shipyardleadership. In particular, POSCO maintains a strongpartnership with Daewoo Shipbuilding & MarineEngineering (DSME), which has contributed toDSME's success as the world's leading shipyard interms of orderbook volume thanks to a focus onenvironment-friendly green technology in the LNGvessel segment.

Based on its second-to-none leadership inmanufacturing exceptional quality steel plate, POSCOalso has combined with KAIST, the representativeKorean engineering and science institute, to developthe world's first high Mn steel grid-pattern LNGstorage tank.

Moreover, KOGAS, the world's No. 2 LNG importer,provided indirect support for POSCO's innovativedevelopment of steel plate with LNG applications.

KS Acquisition Paves Way for 1.4 Trillion WonDomestic Market in 2020

Recognizing POSCO's unique and innovativedevelopment of high Mn steel, the Korean Agency forTechnology & Standards (KATS), operating under the

World's first LNG-powered containership launched by GeneralDynamics NASSCO, which partnered with DSME for state-of-the-art design & shipbuilding technologies.

Cost Comparison of High-Manganese Steel vs. Other Materials

Weight Ratio

Source: 'Metal Materials Development Strategy in Line with Prospects ofEnergy Industry' (Korea Evaluation Institute of IndustrialTechnology, 2012)

Bird's-eye view of DSME high-pressure LNG supply instrument.

High Mn Alu. Alloy SUS 304 9%-Ni

Material Unit Price 53% 100% 88% 114%

Welding Cost 9% 100% 33% 133%

Total Material Requirements 56% 100% 128% 205%

Temperature Materials Design Ratio Weight

Criteria Ratio

Room Al5083-O alloy 1 1

Temperature SUS304 2.38 1.92

9% Ni steel 4.78 1.35

High Manganese 2.46 1.89

-100 C Al5083-O alloy 0.97 1.01

SUS304 2.77 1.78

9% Ni steel 5.40 1.27

High Manganese 3.04 1.70

Source: Journal of the Society of Naval Architects of Korea

Source: 'Metal Materials Development Strategy in Line with Prospects ofEnergy Industry' (Korea Evaluation Institute of IndustrialTechnology, 2012)

2013 2015 2020LNG-FPS 40,000 50,000 70,000

tons/year tons/year tons/yearLNG-Fueled Ship 70,000 21,000 35,000

tons/year tons/year tons/yearLNG-Carrier 23,000 53,000 68,000

tons/year tons/year tons/year

LNG-Related Steel Materials Market Outlook

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POSCO Energy Steel & Solution

umbrellas of the Ministry of Trade, Industry & Energy (MOTIE), has awarded KS(Korean Standard) certification to the newly developed cryogenic steel alloy.

"We made the decision to award the KS mark certifying its market reliabilityconsidering the economic potential of the new material and other factors," a KATSofficial said.

The official continued, "High Mn steel has the potential to replace conventionalaluminum alloy, SUS 304, nickel steel and other alloys, generating a domestic marketalone of about 1.4 trillion won by 2020.

"The exceptional lower cost of using high Mn steel combined with the recentemphasis on green energy and green ships is expected to boost the competitivenessof high Mn steel applications in the emerging LNG era."

POSCO Advances Solution Marketing of New Steel Products inGreen Energy Era

The value of POSCO's development of high Mn steel is increased through itsemphasis on solution marketing and its priority on meeting the needs of eachindividual client.

By combining technology and marketing innovations, POSCO has doubled its valueto clients. Furthermore, with the opening of its Steel Center, the company hasstrengthened its outreach to customers and intensified focus on the sale of strategicproducts such as marine and energy-related materials.

POSCO aims to secure more than 10% of the global market for steel products in theenergy industry with the development of 60 different materials with related industryapplications in conjunction with a win-win solution marketing program.

Marine Economy Korea12

POSCO Energy Steel & Solution

POSCO announced on March 18 that it, jointly withKAIST, has developed the world's first high manganesesteel grid-pattern LNG storage tank that can dramaticallyincrease the storage capacity of an LNG tank.

This new technology, created by combining POSCO'shigh manganese steel with KAIST's grid-patterntechnology, can enhance the storage capacity up to20,000 cubic meters from existing 1,000 cubic meters.

POSCO said that its high manganese steel is anenergy steel that can endure an extremely lowtemperature, thereby being adequate to be used as amaterial for LNG storage tanks.In addition, highmanganese steel can be welded better than stainlesssteel, making it easier to manufacture storage tanks.

The inside of the tank has a grid-pattern which playsthe role of scattering the pressure transmitted to the

external wall, enabling the expansion of the storagecapacity without thickening the external wall.

Unlike existing LNG storage tanks which have acylindrical-type design, the brand-new LNG storagetank has a rectangular design, helping reduce theinstallation space.

POSCO Develop World's First High Manganese Steel Grid-pattern LNG Storage Tank

POSCO has moved to address the problem of noisebetween floors, which is becoming an issue inneighbor-to-neighbor disputes in common housing,including apartments. Recently, POSCO concluded anMOU with construction companies for cooperation inthe 'Development of 'High Manganese-Applied SteelMaterial for Floor-to-Floor Noise Reduction and Anti-Noise Fields.'

Companies participating in the development projectare POSCO E&C, Dong-Ah Steel Technology,Yoochang, Woojin, S.I. PAN, and others. It is knownthat the anti-vibration function of a high-manganesesteel flooring structure is over 10-fold that of a generalsteel flooring system.

As a result of POSCO's laboratory verification, high-manganese steel flooring reduced the noise betweenfloors by 8dB (60% decrease based on sound pressure)compared with existing products. If applied to a

common housing site, the high-manganese steel also isexpected to enable cost savings of over 10% forstructural work as well as increasing floor slab thicknessby more than 60mm.

Vice President & Head of the Steel Business Division atPOSCO Jan In-Hwan said, "With this MOU asmomentum, POSCO has prepared a cooperation areawith customer companies within its Steel SolutionCenter and organized a related steel materialcommittee. POSCO will exert utmost efforts to create ashared-growth ecosystem with customer companies."

Under the MOU, POSCO is appraised as havingestablished a cooperation system for the company toadvance into the floor-to-floor noise reduction materialmarket at an early date. The construction companiesalso are expecting to harvest a strengthening of theircompetitiveness with differentiated technologies in therelated field.

Reducing Noise Between Floors with New Material

Marine Economy Korea 13

POSCO Energy Steel & Solution

POSCO News & Info

Date

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4.23

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4.16

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4.9

3.26

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Korean

최고효율 LNG 복합발전소준공

미국서에너지강재고객사로잡았다

World Premium 제품의호조로 POSCO 1분기영업이익

상승

설비강건화.수익성제고에총력

포항 2소결합리화사업준공

10억弗규모투르크제철플랜트건설

미얀마-포스코신규 CGL 설비투자계획

POSA (POSCO-Australia) 아프리카지역국가들에자원

개발사업투자증대

인도민영철강사메스코스틸과파이넥스1공장이설판매

MOA (관련사진 #1)

“베네핏셰어링더욱활성화한다”

포스코 ICT, 스마트빌딩시스템구축사업활기

SNNC 페로니켈제2공장준공 (관련사진 #2)

티타늄뛰어넘는新철강재개발상업화성공시철강지형

바꾼다

세계최초 BCA 보증강공급

인도에고급車냉연강판공장준공 (관련사진 #3)

EnglishPOSCO Energy dedicates 1,260MW combined cycle

thermal power plant

POSCO showcases its excellence in energy steel at

OTC

POSCO's operating profit in 1st qt. '15 up owing to

good performance of world premium products

POSCO to focus on facility strengthening &

profitability enhancement

POSCO completes replacement work for the old No.

2 sintering furnace facility

POSCO to assume EPC plus O&M of US$1 bil.-scale

steel plant in Turkmenistan

Myanmar-POSCO eyes fast-growing local CGL

market

POSA aims to create synergy as an Australian

representative

POSCO signs MOU with Mesco Steel to sell its FINEX 1

plant (Related pix #1)

POSCO holds workshop on activation of benefit

sharing

POSCO ICT invigorates smart building system

establishment biz

SNCC holds dedication ceremony of Gwangyang

Ferronickel Plant 2. (Related pix #2)

POSTECH develops new steel material challenging

titanium

POSCO to supply BCA (Brittle Crack Arrest)-

guaranteed thick steel plate

POSCO dedicates high-grade car-use cold-rolled

steel sheet plant in India (Related pix #3)

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