South Korea: Hyundai Steel’s production, sales decline q-o-q in Q3CY’22

South Korean steel major Hyundai Steel has released its financial results for Q3CY’22. The company’s production, sales and revenue declined q-o-q in Q3.

• Crude steel production falls 9%: The company’s crude steel production fell by 9% q-o-q to 4.41 million tonnes (mnt) in Q3 compared with 4.86 mnt in the previous quarter. Production decreased due to the damage caused by typhoon Hinnamnor and regular repair in Q3. On y-o-y basis, production dropped 4% against 4.61 mnt in Q3CY’21.
• Sales decline 7% q-o-q: Sales volumes were recorded at 4.52 mnt in Q3CY’22, down 7% compared with 4.86 mnt in the preceding quarter. However, on an annualised basis, sales remained largely flat against 4.53 mnt in the same period last year. Revenue and sales volumes fell due to a decline in prices and the deteriorating steel market condition.
• Revenue decreases 8% in Q3: Revenue decreased 8% q-o-q to KRW 6,028 billion ($4.25 billion) in Q3 against KRW 6,546 billion ($4.61 billion) in the past quarter. However, on y-o-y basis, revenues registered a 17% growth from KRW 5,150 billion ($ 3.62 billion) in Q3CY’21.

Demand scenario in Q3CY’22

• Construction orders slow down: Private orders in the construction sector continued to decline in Q3 amid hike in project procurement costs and sluggish demand from the housing market. Orders from the construction sector are expected to decline marginally by 0.5% y-o-y to KRW 211 tn in CY2022.
• Automobile production to rise on easing supply disruption: Korea’s automobile production is expected to increase by 3.5% y-o-y to 3.58 mn units in CY’22 compared to 3.46 mn units in CY’21. Moreover, production volumes will improve with easing supply chain disruptions. Also, currency depreciation shall boost automobile exports, which are expected to grow by 6.4% y-o-y in CY’22.
• Shipbuilding orders recover: Shipbuilding backorders rose by 22.7% to 36.1 million CGT (compensated gross tonnage) against 29.4 million CTG in the previous year. Korean builders secured 94 out of 115 LNG ship orders until Q3CY’22. Moreover, demand from shipbuilding is expected to improve with easing COVID-related disruptions.