POSCO Income Skyrockets as Ship Builders Pay High Steel Bill
South Korean steel maker POSCO has reported net profit of KWR 1.81 trillion (USD 1.6 billion) in April-June 2021 quarter on surge in steel prices, up 1710% YoY while operating profit rose by 1194% YoY to KWR 2.2 trillion over sales of KWR 18.29 trillion, up 33.3% YoY. POSCO has raised the prices of steel plates for ships to KWR 1.15 million per tonne (USD 1,000), up nearly two times from a year ago.
On the other hand, South Korea’s ship builders, on expected lines, have started declaring losses during April-June quarter of 2021 due to surge in steel plate prices, which takes up about 20% of the overall expense of the ship construction. Korea Shipbuilding & Offshore Engineering, which is a holding company of three leading shipbuilders Hyundai Heavy Industries, Hyundai Mipo Dockyard and Hyundai Samho Heavy Industries, has reported net loss of KWR 722.1 billion (USD 627 million), compared with a net profit of KWR 400 million a year earlier over sales of KWR 3.79 trillion, down 3% YoY. KSOE said that the main reason for the huge net and operating losses was due to increased cost from a surge in prices of steel plates.
The leading local shipbuilders Korea Shipbuilding & Offshore Engineering Co, Daewoo Shipbuilding & Marine Engineering Co and Samsung Heavy Industries Co have bagged better-than-expected new orders in the January-June period. Korean shipbuilders led by Hyundai Heavy Industries Co won new orders worth USD 26.7 billion that amounted to 10.88 million compensated gross tonin the January-June 2021, up 724% as compared with a year ago. It marked the biggest amount of orders since 2008, when the shipbuilding industry boomed before the global financial crisis.