South Korea: POSCO's crude steel output up 21% y-o-y in Q2CY'21
Pohang Iron and Steel Co Ltd (POSCO), a major steel producer in South Korea, reported its Q2CY’21 results today. Steel production and sales have increased y-o-y wit...
Pohang Iron and Steel Co Ltd (POSCO), a major steel producer in South Korea, reported its Q2CY'21 results today. Steel production and sales have increased y-o-y with an improvement in operating capacity during Q2CY'21. However, Q2 of both the years have been impacted by waves of Covid-19 and subsequent lockdowns or containment measures.
Major highlights are mentioned below
1. Crude steel output rises y-o-y- Crude steel production in Q2CY'21 stood at 9.448 million tonnes (mn t) as against 7.793 mn t in the same period last year, rising 21% on a y-o-y basis. Production volumes of hot rolled coils (HRC) stood at 2,52,000 tonnes (t), plates at 1,06,000 t and CR/coated at 229,000 t. The output in Q1CY'21 stood at 9.559 mn t, dipping 1% compared to Q1CY'21.
2. Maintenance schedule: The company scheduled its Gwangyang No. 1, 2, 4 blast furnaces (BF) for wall repair and CR No. 2 for 18 days. Alongside this, Pohang's three FINEX were under maintenance for five days, and 2CAL (Continuous Annealing Line) for 15 days during Q2.
3. Sales volumes continue growing annually- The company's sales volumes increased by 16% on a yearly basis to 8.999 mn t in Q2CY'21 compared to 8.612 mn t in Q2CY'20. Meanwhile, volumes increased by 2% q-o-q against 8.812 mn t in Q1CY'21. Sales of HR stood at 256,000 t, plates at 57,000 t and CR/coated steel at 117,000 t in Q2.
4. Carbon steel sales prices- Carbon steel prices stood at KRW 901 thousand in Q2CY'21, up by 18% q-o-q against KRW 763 thousand in Q1CY'21.
5. Capacity utilisation rate up in Q2- The mill was able to operate at a production capacity of 93.2% in Q2CY'21 as against 77% in CPLY. On the other hand, the capacity utilization rate declined against 95.3% in Q1CY'21 on scheduled maintenance and concerns over new variants of Covid-19 detected in the country.
6. POSCO Maharashtra shows growth in operating profit- The manufacturer's Maharashtra-based plant posted decent growth in its operating profit during Q2CY'21 at $62 million as against $52 million in Q1CY'21. Resumption of price negotiations with automakers was the lead reason. However, there is no comparison against CPLY as India was under stringent lockdown during the period.
Outlook for 2021
The company increased its production and sales guidance for CY'21 to 38.2 mn t and 35.6 mn t respectively against those announced in Q1CY'21 at 37.8 mn t and 35.4 mn t.
Further, the company looks forward to achieving KRW 37 trillion of revenue with a capex of KRW 4.2 trillion during the year.