The three major steel companies in East Asia – China’s Baowu Steel Group, South Korea’s POSCO Holdings and Taiwan’s China Steel Corporation (CSC) – have seen a significant decline in their consolidated financial results for the fiscal year ending December 2022.
Baowu Steel’s consolidated profit for CY’22 is likely to be around RMB 35 billion ($5 billion), a decrease of nearly 50% compared to the previous year. During the October-December 2022 period, the company incurred losses and many group companies were in the red.
POSCO’s consolidated profit stood at KRW 4.9 trillion, down nearly 50% y-o-y due to the sluggish market and disruptions caused by typhoon Hinnamnor. Moreover, it incurred a loss of around KRW 400 billion ($0.32 billion) in the October-December 2022 period. The company is also in a hurry to raise its domestic and global selling prices again, and is expected to become profitable in the January-March 2023 period.
China Steel Corporation (CSC) posted a decline in operating profit by more than 70% y-o-y to TWD 21.1 billion ($0.70 billion) during January-November. Since September, the company has been in the loss for three consecutive months, and sales prices have not improved. Although it appears difficult to make a monthly profit in December, the company is raising its domestic selling prices like other manufacturers and is expected to be profitable for a single monthin the January-March 2023 period.
Due to the deterioration of the market environment, some manufacturers recorded monthly operating losses in September and October, and the sense of crisis in the face of the current situation is growing. In particular, POSCO is rushing to improve its business results by streamlining its organisation, by setting up an “Emergency Management Task Force” in the steel division.
However, business results are improving and breaking out of deficits. The Chinese economy has recovered from the abolition of the zero-corona policy. As a result, steel prices have also shown an upward trend.
Outlook
The market is expected to continue going up after the Lunar New Year holidays. China’s Baoshan Steel has raised its domestic selling price for two consecutive months and will increase again next month. The trend of price increases will continue in the first half of the year due to the upturn in market conditions.
Note: This article has been written in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.
Leave a Reply