South Korea: POSCO's Q1 CY '21 key takeaways

Pohang Iron and Steel Co. Ltd. (POSCO), a major steel producer in South Korea, reported its Q1 CY '21 results today. Steel production and sales have increased y-o-y with an improvement in operating capacity during Q1 CY '21.

Major highlights are mentioned below-

1. Crude steel output rose y-o-y- Crude steel production in Q1 CY '21 stood at 9.559 mnt as against 9.066 mn t in the same period last year, rising by 5% on a y-o-y basis. Production volumes of HRC stood at 2,36,000 tonnes, Plates at 49,000 tons, CR/Plated was at 2,84,000 tons. The output in Q4 CY '20 stood at 9.579 mn t remained largely stable compared with Q1 CY '21.

2. Maintenance schedule- The company scheduled Gwangyang No.1 HR line for 13 days and No.1 Plate line for 14 days.

3. Sales volume grew annually- The company's sales volume increased by 2% on yearly basis to 8.812 mn t in Q1 CY '20 compared to 8.612 mn t in Q1 CY '20. Sales volume of HR stood at 2,46,000 tonnes, Plates stood at 22,000 tonnes and CR/plated steel at 1,14,000 thousand tonnes. However, the same declined by 2% quarterly against 8.992 mn t in Q4 CY '20 due to maintenance shutdowns and other disruptions.

4. Carbon steel sales prices- Carbon steel prices stood at KRW 763 thousand in Q1 CY '21, up by 10% in comparison with KRW 692 thousand in the same period last year. While it also grew by 12% q-o-q basis against KRW 679 thousand in the Q4 CY '20.

5. Capacity utilization rate increased in Q1 CY '21- The mill increased its production capacity to 95% in Q1 CY '21 as against 90% in CPLY. On the other hand, the capacity utilization rate stood at 94% in Q4 CY '20.

6. POSCO Maharashtra shows growth in operating profit- The manufacturer's Maharashtra-based plant posted sharp growth in its operating profit during Q1 CY '21 at $52 million contrasted against the loss of $2 million in Q1 CY '20.

Outlook for 2021- The company aims to keep its guidance for CY'21 crude steel production at 37.8 mn t and product sales at 35.4 mn t. Further, they aim to achieve KRW 32.8 trillion of revenue along with a KRW 4.4 trillion CAPEX during the year.