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MarketScreener Homepage  >  Equities  >  Korea Stock Exchange  >  POSCO    A005490   KR7005490008

POSCO

(A005490)
  Report
End-of-day quote. End-of-day quote Korea Stock Exchange - 11/30
234000 KRW   -2.30%
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SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Steel prices to keep rising on industrial rebound; margins soft

09/15/2020 | 10:56am EST
FILE PHOTO: FILE PHOTO: ThyssenKrupp steel factory in Duisburg

Steel prices are set to keep rising in coming months as economies recover and demand picks up after being hit by the coronavirus pandemic.

Many steel mills are resuming operations after being suspended due to COVID-19, but companies will only benefit modestly due to higher costs.

"In China underlying demand remains exceptionally strong, even though we're past peak growth," said analyst Serafino Capoferri at Macquarie in London.

"The rest of the world is picking up after a horrendous Q2 and Q3, and now we're seeing steel prices recovering pretty strongly across all regions... I think they will continue to rise."

Prices of hot rolled coil steel, used in the manufacturing sector, have shot up 37% since April in China, the world's biggest steel market and the first country to recover from the pandemic.

Prices in Europe and the United States have jumped over the past several weeks.

(GRAPHIC: HRC Steel Prices Surge as Industrial Recovery Gathers Pace - https://fingfx.thomsonreuters.com/gfx/mkt/dgkvllrqqvb/HRC%20Steel%20Prices%20Surge%20as%20Industrial%20Recovery%20Gathers%20Pace.png)

Of 132 million tonnes of blast furnace capacity that was temporarily shut down due to the pandemic, 34% has been or is about to be restarted, according to UBS analyst Myles Allsop.

"We expect producers to announce further restarts of blast furnaces over the next few months due to operating issues caused by extended outages," he said in a note.

(GRAPHIC: Steel Blast Furnaces Restarting after Shutdowns Steel Blast Furnaces Restarting after Shutdowns - https://graphics.reuters.com/STEEL-OUTLOOK/rlgvdjmwmvo/chart.png)

Steel demand is being fuelled by a global revival of industrial production, with JP Morgan's global manufacturing purchasing managers' index touching a 21-month peak in August, and rising sales in the key auto sector.

(GRAPHIC: New Passenger Car Registrations -

)

(GRAPHIC: Global Industrial Sector Rebounds -

)

Despite the revival in steel prices, company margins are still suffering due to high costs, especially of iron ore. Spot prices of the raw material <SH-CCN-IRNOR62> are hovering at the highest levels since January 2014.

(GRAPHIC: Steel Company Profits Hit Despite Steel Price Rebound Steel Company Profits Hit Despite Steel Price Rebound - https://graphics.reuters.com/STEEL-OUTLOOK/jbyvrmolwpe/chart.png)

Profitability in China is also under pressure.

"Spot domestic margins are showing signs of compression as softer pricing is being compounded by rising raw material costs," Jefferies analyst Alan Spence said in a note.

By Eric Onstad


© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
MACQUARIE GROUP LIMITED 0.86% 138.67 End-of-day quote.0.59%
POSCO -2.30% 234000 End-of-day quote.-1.06%
UBS GROUP AG 0.89% 13.005 Delayed Quote.5.44%
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Financials
Sales 2020 57 912 B 52,3 B 52,3 B
Net income 2020 1 210 B 1,09 B 1,09 B
Net Debt 2020 8 912 B 8,05 B 8,05 B
P/E ratio 2020 15,5x
Yield 2020 3,16%
Capitalization 19 257 B 17 381 M 17 389 M
EV / Sales 2020 333x
EV / Sales 2021 316x
Nbr of Employees -
Free-Float 89,8%
Chart POSCO
Duration : Period :
POSCO Technical Analysis Chart | MarketScreener
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Technical analysis trends POSCO
Short TermMid-TermLong Term
TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 27
Average target price 279 814,81 KRW
Last Close Price 245 500,00 KRW
Spread / Highest target 26,3%
Spread / Average Target 14,0%
Spread / Lowest Target 1,83%
EPS Revisions
Managers
NameTitle
Jeong-Woo Choi Co-Chief Executive Officer & Director
In-Hwa Chang Co-President, Co-CEO & Director
Seung-Kyu Lim Senior Managing Director & Head-Finance
Hag-Dong Kim Director & Senior Executive Vice President
Tak Jeong Director, Senior EVP & Head-Marketing
Sector and Competitors
1st jan.Capitalization (M$)
POSCO-1.06%16 567
ARCELORMITTAL-1.87%19 400
NUCOR-4.58%16 214
NIPPON STEEL CORPORATION-22.82%11 264
TATA STEEL LIMITED22.43%8 934
STEEL DYNAMICS, INC.6.37%7 617