South Korea: POSCO's 4Q'22 sales drop by 57% amid flood, weak demand

POSCO, an integrated steel manufacturing company, announced its business results for 2022. The company produced 151,000 tonnes (t) of stainless steel during the fourth quarter of last year (October-December 2022), around 57% reduction from the third quarter.

A decrease in quarterly production was caused by production cuts in the third quarter as a result of weak demand. Moreover, September 2022 saw shutdowns due to floods, which was followed by a significant decline in sales in the fourth quarter.

POSCO's stainless steel product sales were 186,000 t in the fourth quarter of 2022 (October-December), a 47.2% decrease from the last quarter.

Notably, the sales performance of POSCO's stainless steel segment last year revealed a continuing downturn following the first quarter.

Furthermore, annual sales of stainless steel products in 2022 were 1,487,000 tonnes, a 25% drop y-o-y.

Additionally, while sales at Zhangjiagang Pohang Stainless Steel (PZSS), a POSCO stainless steel manufacturing company in China, were stable in 2022, the company suffered an operational loss.

It may be recalled here that last year, PZSS registered sales of $3.275 billion. It had a operating loss of $59 million.

According to the company, the conflict between Russia and Ukraine has driven up the price of raw materials for stainless steel and increased demand for nickel for manufacturing batteries. The company also stated that the 'drastic drop' in demand brought on by the Chinese government's continued implementation of the Covid-19 quarantine policy resulted in an operating loss.