AT A GLANCE: Posco posts Q2 operating loss of $165 million due to Covid-19

A summary of the steel segment of South Korean mill Posco’s earnings report for the second-quarter ended June 30, released on Tuesday July 21.

In brief
  • Operating loss of 197 billion Won ($165 million) recorded for April-June, compared with an operating profit of 805 billion Won in the same period of last year.
  • Overseas steel businesses incurred an operating loss of 93 billion Won, compared with an operating profit of 38 billion Won a year earlier.
  • Sales fell by 11% in second quarter due to lockdowns imposed in major markets to contain the spread of Covid-19 weakening downstream demand and prices.
  • Restart of No3 blast furnace in Gwangyang delayed to July from June; hot metal ratio to be adjusted.
  • Posco not expecting domestic automotive industry to recover fully in third quarter, although some car producers expected to increase operating rates in middle of quarter.
  • Domestic sales increased in response to trade barriers in major countries.
  • Steel imports from Japan and China totaled 4.3 million tonnes in the first half of 2020, compared with 5.1 million tonnes a year earlier. It is replacing imports from China and Japan with tailored solutions to domestic clients.
  • Sales of automotive and solar power structural steel amounted to 4 million tonnes in first half; Posco aims to sell 6.3 million tonnes in second half
  • Automotive steel sales alone totaled 3.1 million tonnes in first half; it expects to sell 3.8 million tonnes in second half.

Key figures
Carbon steel production
Total: 7.46 million tonnes, down 11% from 8.39 million tonnes a year earlier

Steel sales
Total: 7.76 million tonnes, down 11% from 8.75 million tonnes a year earlier
Domestic: 4.23 million tonnes, down 16% from 5.02 million tonnes a year earlier
Exports: 3.53 million tonnes, down 5% from 3.72 million tonnes a year earlier

Steel inventory
1.12 million tonnes, down 8% from 1.22 million tonnes a year earlier

Paul Lim

paul.lim@fastmarkets.com

Published

Paul Lim

July 22, 2020

09:30 GMT

Singapore