SEOUL ⸺ South Korean steelmaker POSCO posted on Monday its highest quarterly profit since the second quarter of 2011, as steel prices rose sharply due to demand outpacing supply.
The world’s fifth-biggest steelmaker said first-quarter operating profit surged 120% as “profit from all sectors, such as steel, global and infrastructure, and new growth, improved”, including a 12% sequential jump in its carbon steel sales price.
In an earnings call, POSCO said it expected steel supply from Australia, Brazil and South Africa to rise in the second half of the year after declining in the first quarter.
It said steel prices were likely to stabilise gradually compared to the first half as demand was expected to fall slightly because of output cuts in China due to tougher environmental curbs.
POSCO’s consolidated operating profit came in at 1.55 trillion won ($1.39 billion) for the January-March quarter, matching a forecast made by the company earlier this month and beating a market consensus of 1.3 trillion won, according to Refinitiv Smartestimate. It had reported 705 billion won in operating profit a year earlier. First-quarter revenue rose 11% to 16.1 trillion won.
Global steel demand is expected to grow by 5.8% this year, higher than the 4.1% estimate made in October, as economies recover from the COVID-19 pandemic, fuelling demand from the rebounding auto and construction sectors, the World Steel Association said this month.
POSCO shares fell 0.4% after the earnings announcement, while the wider market rose 0.6%.
($1 = 1,114.1300 won)
Reporting by Joyce Lee; Editing by Krishna Chandra Eluri and Subhranshu Sahu; Reuters