South Korea: POSCO reports drop in production, sales in Q2CY’22

South Korean steel giant, POSCO, released its Q2CY’22 results on 21 Jul’22. The company’s quarterly crude steel production and steel sales decreased q-o-q during the period under purview.

Highlights:

1) Crude steel production drop 3% q-o-q: The company’s crude steel production recorded a decline of 3% to 8.54 million tonnes (mnt) in Q2CY’22 as against 8.77 mnt a quarter ago. Similarly, on y-o-y basis, production volumes dropped 10% against 9.45 mnt in Q2CY’21.

The decline is because of revamping in the major facilities.

• Blast furnace revamping: POSCO’s Gwangyang works’ blast furnace 4 underwent revamping for 120 days from mid February to mid June 2022.
• Pohang works: HR mill 2 and stainless steel 2 and 4 underwent largescale maintenance for 14 days.
• Gwangyang works: HR mill 3 and 4 underwent maintenance for 20 days and CR mill for 8 days.

2)Sales fall 3% q-o-q: Company’s sales fell 3% to 8.23 mnt in Q2CY’22 in contrast with 8.45 mnt in the previous quarter. On an annualised basis, sales dropped 8% from 8.99 mnt in Q1CY’21.

3)Revenue rise 5% q-o-q: The company’s revenue increased 5% to KRW 11,871 billion in Q2CY’22 from KRW 11,272 billion in the previous quarter. Y-o-y, company’s revenue rose 28% from KRW 9,277 billion in Q2CY’21.

• PT. Krakatau POSCO: The joint venture between Krakatau and POSCO, Korea reported a significant rise in revenues and operating profits. Operational profits of the company rose from $82 million in Q1CY’22 to $125 million in Q2CY’22. Operating profit increased on the quarter through sales mix based on the market situation and selling HR with slab, after being processed from KS.
• POSCO Maharashtra performance: POSCO’s Maharastra-based unit recorded revenue at $388 million in Q2CY’22, down 7% against $419 million in Q1CY’22. On the other hand, y-o-y revenues rose 5% against $370 million in Q2CY’22.Operating profits dropped sharply from $54 million in Q1 to $20 million in Q2CY’22. The company’s sales volumes and prices witnessed a downward trend due to steel export tax imposed by the Indian government and slow demand from construction and distribution. Sales stood at 3.22 mnt in Q2CY’22 as against 3.40 mnt in Q1.

• POSCO International performance: POSCO International reported growth in steel revenues at KRW 7,993 billion, up 16% against KRW 6,901 billion in Q1. On y-o-y basis, too, revenues reported a growth of 55% against KRW 5,172  billion. The steel major mentioned that its steel revenue increased as product and raw material sales price went up during the period. Steel sales rose to 3.55 mnt in Q2CY’22 from 3.51 mnt in Q1CY’22.