POSCO's profit fell by half due to high prices for ore
POSCO, the largest steel producer in South Korea, reported a 32.1% decrease in operating profit in the third quarter, in line with analysts' estimates as higher raw material costs weighed on margins.
The company said it expects moderate growth in global steel demand in 2019, as spending on infrastructure and the real estate market in China will support stable demand for steel despite a weakening manufacturing sector in the country.
POSCO reported a consolidated operating profit of 1.0 trillion won (approximately $ 854.34 million) for the period July-September 2019, up from 1.5 trillion won a year earlier. POSCO's net income fell 53.0% to 497.0 billion won and revenues fell 2.6% to 16.0 trillion won.
Iron ore prices skyrocketed to five-year highs in July amid declining supplies from leading exporters in Australia and Brazil. At the same time, economic growth in China, the world's largest consumer and producer of steel, slowed to 6% year-on-year, the lowest in nearly three decades, driven by lower output amid prolonged Sino-US trade. p>