POSCO Holdings, a holding company of South Korean steel giant POSCO, announced on the 21st that its operating profit fell by 4.5%, which was in line with its own forecast. Although the product price was raised, it could not catch up with the rapid increase in raw material costs.
Consolidated operating profit decreased from 2.2 trillion won in the same period of the previous year to 2.1 trillion won ($ 1.61 billion). Sales increased by 25.7% to 23 trillion won, a record high.
Analysts have raised prices for some commodities but pointed out that the rise in coking coal prices has outpaced them. Operating profit is likely to decline from the previous quarter as steel prices are expected to fall in the third quarter due to sluggish demand.
Analysts at Hana Financial Investment point out that sluggish demand in China is squeezing commodity prices. "Although the lockdown has been lifted, China's demand did not recover at all in June and was unexpected," he said.
Yuanta Securities analysts have analyzed that heavy rains and heat waves in China are also declining steel demand. Market conditions are expected to improve as companies secure inventories before September-October.
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