Downturn in the steel industry

Korean steel industry in deep trouble - POSCO

POSCO said that Korea's steel industry is in deeper trouble than was previously realized.

Steel guru,

22 April, 2012

The country's largest steelmaker vowed to make amends in 2012 by pursuing austerity measures and slashing investments.

It posted KRW 9.46 trillion in sales and KRW 422 billion in operating profit for the first three months. Sales dropped by 6% QoQ and operating profit plunged 39%.

Mr Park Ki hong executive director of POSCO said that "The sales and OP declined from the previous quarter as high priced materials that were contracted last year were supplied this year."

The steelmaker's quarterly operating profits used to be around one trillion won. However, its earnings have almost halved from a year ago as Europe's debt crisis has helped shrink global demand and raw materials have shot up.

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JFE posts massive loss for 2011-12

Steel guru,

22 April, 2012

World's No 5 steelmaker JFE Holdings Inc has posted net loss of JPY 36.63 billion in fiscal 2011, a reversal from a profit of JPY 58.61 billion a year ago, on valuation losses from overseas stock investments it was promoting as part of its growth strategy.

Operating profit sank by 75.5% YoY to JPY 44.78 billion on sales of JPY 3.17 trillion, down by 0.9%.

JFE said “Weakened demand for its mainstay steel products at home and abroad, the yen's strength and higher materials prices were also blamed for the poor showing.”