Seoul: Hyundai Steel, South Korea’s second-largest steelmaker, on Wednesday said sales volume would rise 18% in the second quarter from the first quarter, driven by solid demand from state infrastructure projects and traders restocking.
“Shipments of construction steel are seen rising slightly as distributor inventories have fallen to low levels and demand from public works is set to rise. But private sector demand is likely to continue to remain depressed,” Hyundai said in a statement.
It projected prices for steel plate, used in cars, home appliances and ships, to come under pressure as raw materials prices for 2009/10, which have yet to be fixed, are expected to decline.
Hyundai reported a 62% drop in first-quarter net profit to 51.5 billion won ($38.18 million) from a year earlier, as it slowed production rates sharply, increasing per-unit manufacturing costs.
Hyundai reduced output and steel sales volume by around a quarter to 2.1 million tonnes in the first quarter from a year earlier.
Steelmakers in South Korea, a net steel importer, are faring better than regional rivals because of relatively tight domestic market conditions.
On Tuesday, Japan’s Nippon Steel, the world’s No.2 steelmaker, forecast zero profit this financial year after reporting its first quarterly loss since it started filing three-month results in 2004.
China’s Baosteel reported a 98% drop in quarterly profit on Tuesday and forecast dismal results for the first half amid the weakened steel market.