As the cost of raw materials dropped thus giving much needed compensation for weak steel prices, POSCO, a South Korean steelmaker is able to post on Thursday the highest profit for operation in five quarters.
With citation of a seasonal demand and the automobile industry’s improvement, the world’s sixth-largest maker of steel stated that it has foreseen, from the previous quarter until the current quarter, a small increase in the demand for the material.
The operating profit in the third quarter had totaled to 635 billion won (601.66 million) growing from last year’s 443 billion won in that same period. 22 analysts polled by Reuters compared the result with a mean estimate of 601 billion won.
The steelmaker also stated that at 7.29 trillion won, sales were down 2 percent.
It is notable that KDB Daewoo Securities analyst Jeung Seung-hun stated that a meaningful profit recovery will be achieved by POSCO if the price of steel will go up. He then further stated that global economic recovery will be unpredictable unless stimulus measures for its economy is launched by China, this in reference to the fact that the industry has suffered due to the severe decrease of momentum in the country’s economic growth, it being the world’s largest producer and consumer of steel.