[Click eStock] POSCO Holdings, Q2 Price Increase Expected

[Asia Economy Reporter Junho Hwang] Hana Financial Investment maintained the target price for POSCO Holdings on the 31st, expecting price increases from the second quarter of this year.

In fact, POSCO Holdings' performance in the first quarter of this year is expected to fall short of market expectations. Due to weak demand in the off-season and price reductions caused by falling prices of imported products, securing performance is challenging. Sales volume is also expected to be limited to 8.41 million tons due to the impact of the maintenance of the Gwangyang No. 4 blast furnace, which began last month. Accordingly, the operating profit for the first quarter is forecasted to be 1.6 trillion KRW, lower than the market expectation of 1.54 trillion KRW.

However, with the peak season starting next month and the supply disruptions caused by Russia's invasion of Ukraine, along with strong prices of steel raw materials and energy, steel prices are rising. In particular, hot-rolled coil prices are recently trading at 1,700 euros per ton, and European steel prices are rising most prominently. With the EU's full-scale ban on imports of Russian steel products, exports to Europe from Turkey, India, and other Asian countries are expected to expand, along with a simultaneous rise in domestic steel prices. In China, although steel price increases have been limited due to city lockdowns caused by the spread of COVID-19, a full-scale price increase is expected with the start of the peak season and the lifting of lockdowns.

Seongbong Park, a researcher at Hana Financial Investment, said, "Domestic steelmakers including POSCO Holdings have announced price increases for major products centered on distribution prices in March and April, and we judge that there is a high possibility of additional increases in the second quarter." He added, "We expect a positive impact from aggressive price increases, so we maintain a 'Buy' investment opinion and a target price of 430,000 KRW."

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