[Click eStock] "POSCO, Q2 is the bottom... Performance improvement from the second half"

Q3 Operating Profit Expected to Exceed 380 Billion Won, Up 584% QoQ
Anticipation of Improved Steel Demand from China and Rising Sales Prices

On the 18th, when POSCO, the largest steel company in Korea, held an emergency temporary board meeting, reporters gathered at the POSCO Center on Teheran-ro, Gangnam-gu, Seoul. Although the agenda of this board meeting was not disclosed, there are claims that it is related to the position of Chairman Kwon Oh-joon. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Minwoo Lee] POSCO is expected to enter a full-scale recovery phase in the second half of the year after hitting a low point in the second quarter. This is due to price increases, recovery in production and sales volume, and improvements in supply and demand in China.

On the 19th, Hyundai Motor Securities maintained a 'Buy' rating and a target price of 240,000 KRW for POSCO. The closing price on the previous day was 186,500 KRW. Although poor performance is expected until the second quarter, it is judged that a full recovery will begin in the second half of the year.

In fact, poor performance was anticipated in the second quarter. Hyundai Motor Securities forecast POSCO to record separate basis sales of 5.941 trillion KRW and operating profit of 60.1 billion KRW, representing decreases of 21% and 92% respectively compared to the same period last year. Researcher Hyunwook Park of Hyundai Motor Securities explained, "This is an already expected downturn," adding, "Sales volume decreased due to weak export demand, fixed costs per ton increased due to production cuts, and the average selling price declined due to an increase in hot-rolled steel sales."

From the third quarter, a full recovery is expected to begin. Operating profit on a separate basis for the third quarter is forecasted at 381.4 billion KRW. Although this is 42.3% lower than 662 billion KRW in the same period last year, it represents an increase of about 534% compared to the previous quarter. Distribution and export prices in China have already risen, and major overseas steel companies are raising sales prices this month and next, which is seen as a positive factor.

Researcher Park said, "In the second half, China's crude steel production is unlikely to increase compared to the same period last year, while steel demand has been improving since May, and Chinese steel distribution inventory is expected to adjust to normal levels during the third quarter, improving supply and demand conditions." However, he noted, "The recent sharp rise in iron ore prices is a burden, and the extent of domestic price increases in the second half will be crucial."

This content was produced with the assistance of AI translation services.