South Korean steelmaker Posco reported more than double operating profits in Q1 2021 (January-March) recorded its highest quarterly profit in the March quarter since Q2 2011 amid a sharp rise in steel prices, globally.
In Q1 2021, the steelmaker posted operating profits at KRW1,552bn, a 120pc rise against KRW705bn in Q1 2020 while the same was up 80pc from the KRW863bn in Q4 2020. This jump has been attributed to higher profits in all business segments. Revenue grew by 10.5pc from the prior year to KRW16.06 trillion. Net profit was KRW1.13 trillion ($1bn), up 162pc from Q1 2020.
Steel’s segment consolidated operating profit rose to KRW1,334bn in Q1 2021 from KRW383bn the prior-year quarter and KRW678bn in Q4.
Crude steel and finished steel production marginally dropped from Q4 amid maintenance and fewer working days in Q1. Production of crude steel was at 9.56mn mt in Q1 2021 against 9.58mn mt in Q4 2020.
Finished steel sales volume in Q1 rose to 8.8mn mt in Q1 2021, up from 8.62mn mt in Q1 2020 and below 8.99mn mt in Q4.
The average price for finished carbon steel rose to KRW763,000/mt in Q1 from KRW679,000/mt in Q4 2020 and KRW692,000/mt in Q1 2020. Iron ore costing rose from KRW100,000/mt in Q4 2020 to KRW116,000/mt in Q1 2021, the company said in its release.
HRC sales rose to 246,000mt, plates 22,000mt and CR/plated steel to more than 114,000mt.
Posco group subsidiary in India, Posco Maharashtra’s operating profits rose to $52mn in Q1 2021 against $30mn in Q4 2020 and $2mn in Q1 2020. Profit geared up as price climbed due to improved steel demand, led by auto and home appliance industries.
The steelmaker is ambitious about its expansion plans in India. Posco is mulling to set up a new steel-making facility in Odisha state with an investment of Rs900bn ($12bn) project. This would be the largest single foreign direct investment in India for an integrated steel plant. In 2017, Posco had scrapped its project to build an annual 12mn mt capacity steel plant near Paradip with an investment of Rs520bn.