South Korean steelmaker Pohang Iron and Steel Co. (POSCO) has announced its consolidated financial results for the first quarter of the current year, reporting a net profit of KRW 671 billion ($577.6 million), down 12.7 percent compared to the same quarter of the previous year.
In the first quarter, POSCO's sales revenues increased by 0.7 percent year on year to KRW 7.82 trillion ($6.73 billion), while its operating profit amounted to KRW 833 billion ($717.72 million), falling by 18 percent compared to the same quarter of the previous year.
In the first quarter this year, POSCO produced 9.4 million mt of crude steel, up 1.27 percent year on year, while its finished steel sales decreased by 0.11 percent year on year to 9.3 million mt.
POSCO stated that the second quarter outlook does not seem very bright as raw material prices remain strong and there is a time lag in prices being pass through. According to the company, in the second quarter there will be a squeeze on margins on quarter-on-quarter basis, but the Chinese market will start to impact the Korean market, which will have a full effect in the second and the third quarter. Regarding iron ore prices, POSCO predicts that supply uncertainties caused by the dam collapse in Brazil will continue until major suppliers completely recover from the disaster, so the price is expected to move around mid-to-high $80s/mt in the second quarter.