POSCO said that it has eased production restraints for the first time this year, offering a sign that the nation's upstream industries are recovering.

POSCO appears to be using more than 90% of its production capacity since the start of the month. Output of crude steel in the April to June 2009 quarter was down by just 13% YoY to 7.13 million tonnes as compared with a 25% YoY drop to 6.14 million tonnes in the previous quarter. New foreign customers appear to have contributed to the production increase.

Operating profit for the April to June 2009 quarter plunged by 91% YoY to KRW 170 billion and sales fell by 15% YoY to KRW 6.34 trillion.

The declines stem from sharp cuts in the domestic prices of key products, including hot rolled coil steel, which was discounted from KRW 850,000 a tonne to KRW 680,000 a tonne. Export prices, meanwhile, were lowered 54% on average in the January to March quarter. The reductions reflect drops in the prices of iron ore and other raw materials.

(Sourced from Asia Pulse)