SEOUL, April 25 (AJP) - South Korea’s top steelmakers, POSCO and Hyundai Steel, posted disappointing first-quarter results as a confluence of weak global demand, Chinese oversupply, and new U.S. tariffs weighed heavily on the industry.
POSCO Holdings reported 14.96 trillion won ($11 billion) in revenue from its steel division and an operating profit of 450 billion won ($330 million), according to financial statements released Friday.
Hyundai Steel swung to an operating loss of 19 billion won on sales of 5.56 trillion won, following a net profit a year earlier. The company also reported a net loss of 54.4 billion won for the quarter.
Though POSCO’s profits rose 32 percent year-on-year — thanks in part to higher product prices and aggressive cost-cutting — they remain significantly below the 1.33 trillion won it posted during the peak of the steel cycle in early 2021. Hyundai Steel, meanwhile, saw its sales fall by 6.5 percent, a stark reflection of the industry's deepening malaise.
A steep decline in construction activity, a key driver of steel demand, has hit both companies hard.
Residential construction starts in South Korea totaled just 26.9 million square meters last year — roughly 70 percent of average levels — according to the Korea Construction Industry Research Institute. The drop has sharply reduced shipments of rebar and other construction-grade products.
At the same time, Chinese steelmakers have flooded the market with low-priced exports, undercutting Korean producers by as much as 30 percent. In response, Hyundai Steel last July filed an anti-dumping petition against Chinese manufacturers of steel plate and hot-rolled coil.
“Chinese oversupply is a structural threat to our competitiveness,” a Hyundai Steel official said, requesting anonymity to speak candidly.
New U.S. trade policies have further exacerbated the industry’s woes. Under measures enacted in March, the Trump administration imposed a 25 percent tariff on all imported steel and aluminum products.
As a result, Korean steel exports to the United States fell 10.6 percent year-on-year last month. Analysts warn the decline may deepen, given the typical lag between export contracts and shipments.
Facing mounting pressures, both companies are accelerating overseas investments as a long-term hedge.
POSCO is moving forward with a joint venture steel mill in India with JSW Group and has signaled increased collaboration with Hyundai Motor Group in the mobility sector. The company is also planning a co-investment in a U.S.-based steel mill to mitigate the impact of American tariffs.
Hyundai Steel, for its part, announced plans last month to build an electric arc furnace integrated mill in Louisiana, with an annual capacity of 2.7 million tons. The plant will supply automotive-grade steel to Hyundai, Kia, and other global automakers.
reporter
Candice Kim
candicekim1121@ajupress.com
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