Posco and BHP signed an agreement on September 24 to test BHP's Pilbara iron ore in Posco's hydrogen-based HyREX steelmaking process. The trials build on a 2025 partnership and aim to find ore suited to a technology that replaces coal with hydrogen.
At a glance
- Posco and BHP signed a HyREX collaboration agreement on September 24 to test Australian Pilbara iron ore for hydrogen-based steelmaking.
- The tests will run at Posco's Pohang demonstration plant, planned as the first large-scale hydrogen fluidized-bed ironmaking plant with 300,000 tonnes of yearly capacity.
- The agreement builds on an October 2025 memorandum of understanding witnessed by Australian Prime Minister Anthony Albanese.
Background
Making steel from iron ore traditionally uses coal as the chemical agent that strips oxygen from the ore, which is why steelmaking produces roughly 7% of global carbon emissions. Posco's HyREX process replaces that coal with hydrogen, using a fluidized bed reactor and an electric smelting furnace. Unlike most hydrogen ironmaking routes, HyREX is designed to run on ordinary fine iron ore instead of processed pellets, which is what BHP's Pilbara ore now needs to prove it can do.
What happened
Posco and BHP signed a collaboration agreement on September 24 to test BHP's Pilbara iron ore in Posco's hydrogen-based HyREX ironmaking process, the companies said. The agreement follows a memorandum of understanding the two firms signed in October 2025, which was witnessed by Australian Prime Minister Anthony Albanese. Posco Research Labs' Um Kyung-keun said the deal shows "a steelmaker and a global raw material supplier are together preparing for the future of low-carbon steelmaking."
Why the ore needs testing
Making steel normally means burning coal to strip oxygen out of iron ore inside a blast furnace, the single largest source of carbon emissions in steelmaking. HyREX instead uses hydrogen as the reducing agent, combining a fluidized bed reactor with an electric smelting furnace. Unlike most hydrogen-based ironmaking processes, which need iron ore pressed into pellets first, HyREX is designed to run on ordinary fine ore.
That means Posco has to test how different ore grades and impurities, including BHP's Pilbara iron ore, behave inside the reactor before commercial-scale use. Beyond the ore tests, the two companies also plan to exchange technical expertise. They will also explore ways to cut Scope 3 emissions across the raw material supply chain that feeds steelmaking.
What comes next
The testing will take place at Posco's HyREX demonstration plant in Pohang, South Korea, billed as the first large-scale hydrogen-based fluidized-bed ironmaking plant, with a planned annual capacity of 300,000 tonnes. Construction is expected to begin soon, with commissioning targeted for early 2028. The technology is designed to meet the International Energy Agency's near-zero steel benchmark of 0.40 tonnes of CO2 per tonne of crude steel from ore-based production, well below conventional blast-furnace routes.
Our read
Outlook: neutral. This is an early-stage technology trial, not a supply or output change, so it has no near-term effect on iron ore or steel prices, though it could reshape long-term ore-grade demand if HyREX reaches commercial scale.
What to watch
- Whether Posco's Pohang HyREX demonstration plant begins construction and stays on track for its early-2028 commissioning.
- Whether the test results lead to a long-term Pilbara ore supply agreement between BHP and Posco.
- Whether other steelmakers pursuing hydrogen ironmaking adopt a similar fine-ore approach instead of pelletized feed.
For information only, not investment advice.
Iron price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 2025-10-30: BHP and Posco sign a memorandum of understanding on hydrogen ironmaking, witnessed by Australian PM Anthony Albanese.
- 2026-09-24: The two companies sign a HyREX collaboration agreement to test BHP's Pilbara iron ore.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
South Korea
Australia