In the first quarter of the current year, the combined sales of four major listed South Korean cold rolled steel service centers reached KRW 502.48 billion ($427.81 million), up 19 percent from the same period last year, as reported by South Korean industry sources. However, their aggregate operating incomes and net profits in the given quarter respectively dropped 13.9 percent to KRW 17.5 billion ($14.89 million) and decreased by 16.1 percent to KRW 16.88 billion ($14.37 million) as compared to the same period in the previous year.
Looking at the companies in question, Sungwoo Hitech, a CR steel service center which is a subsidiary of South Korean steel producer Hyundai Hysco, enjoyed an increase not only in sales, but also in operating income and net profit for the first three months of the year, thanks to brisk automotive exports by Hyundai Motor and Kia Motors.
However, the three other CR steel service centers, i.e., Bookook Steel, Geumgang Steel and Gyeongnam Steel, saw their sales, operating incomes and net profits drop in the first quarter of the year on year-on-year basis due to worsened overall market conditions particularly in the automotive sector.
It is expected that the South Korean cold rolled steel service centers may be able to improve their business performances to some degree in the second quarter. However, taking into consideration the large inflow of low-priced cold rolled steel into the domestic market, analysts say that the South Korean CR steel service centers may find it hard to avoid a year-on-year drop in their overall second quarter business performances.