POSCO Chairman Choi Jeong-woo: "Steel Industry to Show Recovery Trend in Q3"

[Asia Economy Reporter Park So-yeon] Choi Jung-woo, chairman of POSCO, cautiously predicted that the steel industry will pass its bottom and show signs of recovery in the third quarter of this year.

Before attending the '3rd Post-Corona Industrial Strategy Dialogue' held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul on the 15th, Chairman Choi told reporters, "Although it is cautious, I expect recovery around the third quarter."

The steel industry is facing a double hardship with both exports and domestic sales sluggish due to the spread of the novel coronavirus infection (COVID-19). Exports in April decreased by 24.1% compared to the same month last year, and it is expected that exports will decrease by more than 20% in May and June as well. Domestic sales have shown a decline for four consecutive years, and this year, it is analyzed that sales may fall below 50 million tons for the first time since 2009.

In response, the domestic steel industry is operating an emergency management system and coping with the crisis through the sale of non-core assets and cost reduction, but due to prolonged weak demand, sales and operating profits have significantly decreased, causing great difficulties. Chairman Choi said, "I will convey the difficulties of the steel industry well and work with the government to overcome this difficult situation."

Regarding the plan to promote an integrated logistics corporation within the POSCO Group, Chairman Choi also addressed concerns that it might take away business opportunities from small and medium-sized enterprises. He explained, "There is a misunderstanding that this is an entry into the logistics business, but it is about consolidating logistics-related tasks scattered across group companies into one place to improve efficiency," adding, "It will be responsible for integrated contracts and operational management of transportation volumes for POSCO and group companies, as well as planning transportation of raw materials and products and transportation contracts, and nothing beyond that."

He reiterated, "It is legally restricted and absolutely not an entry into the shipping business." He added, "We will proceed in a direction that cooperates with logistics and shipping-related companies by applying smart factory know-how to create synergy."

The dialogue was attended by industry officials including Sung Yun-mo, Minister of Trade, Industry and Energy, Chairman Choi, and Andong-il, president of Hyundai Steel. Businesspeople requested the government to include the steel industry in the support targets of the Industrial Stability Fund currently under discussion, while expanding liquidity support, as liquidity difficulties are increasing due to weak demand in upstream industries and a sharp decline in exports.

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