[Click eStock] "POSCO, the Biggest Beneficiary of Global Steel Price Strength"

[Asia Economy Reporter Eunmo Koo] POSCO is being recognized as the biggest beneficiary of the recent global steel price surge.

Hanwha Investment & Securities estimated that POSCO's consolidated operating profit for Q4 last year will increase by 29.2% compared to the previous quarter, reaching 861.7 billion KRW. Researcher Kim Yuhyuk of Hanwha Investment & Securities explained in a report on the 4th, "The recovery in steel product sales volume and the rise in average selling price (ASP) due to the global steel price strength are the main factors behind the expected strong performance." He added, "Despite the sharp rise in iron ore prices expanding cost burdens recently, steel prices have risen rapidly, improving the spread," and forecasted that the performance of non-steel business units will also record a favorable level.

The global steel price strength is expected to continue through the first half of this year. Over the past two months, global steel prices in China, the US, Europe, and Asia have surged 20-30%, maintaining the strong trend. This is believed to reflect government stimulus policies and expectations for economic recovery. During the same period, iron ore prices have also recorded ultra-strong levels, further supporting the price increase. Researcher Kim analyzed, "Considering that major steelmakers have announced price increase plans for January next year, the upcycle is expected to continue through the first half of this year," and "price increases by major demand sectors are also sufficiently expected."

The investment opinion was maintained as 'Buy,' and the target price was raised from the previous 280,000 KRW to 350,000 KRW. Researcher Kim evaluated, "Currently, POSCO's stock price is at about 0.46 times the 12-month forward price-to-book ratio (PBR)," and "Considering that POSCO's stock price is more sensitive to Chinese steel prices than to its earnings, there is ample room for further price appreciation."

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