The performance of South Korean steel companies in the second quarter of this year varied based on product composition and export ratios. While Dongkuk Steel and KG Steel improved their results through increased exports, Posco Holdings benefited from higher sales prices and volumes. In contrast, Hyundai Steel reported a decline in operating profit compared to the same period last year.
According to industry sources on August 3, Hyundai Steel recorded consolidated sales of 6.1073 trillion won and an operating profit of 577 billion won in the second quarter. Although sales increased by 2.7% year-on-year, operating profit fell by 43.3%.
The company's heavy reliance on the domestic market proved to be a disadvantage. Hyundai Steel has a significant share of construction-related products, including automotive steel plates and rebar, but the ongoing slump in the domestic construction sector has negatively impacted its performance. While sales volumes increased compared to the previous quarter, the burden of raw material costs and high exchange rates limited the ability to raise product prices sufficiently, restricting profit recovery.
In contrast, Dongkuk Steel, KG Steel, and Posco Holdings reported improved results compared to the same period last year, driven by increased exports, higher sales volumes, and rising product prices.
Dongkuk Steel achieved standalone sales of 995.5 billion won and an operating profit of 456 billion won in the second quarter, marking increases of 11.4% in sales and 52.3% in operating profit year-on-year.
As the industry enters its seasonal peak, sales of construction steel products have risen, and production and sales of shipbuilding plates have also expanded. Continued demand for large infrastructure investments, including semiconductor plants and artificial intelligence (AI) data centers, along with increased overseas sales, contributed to improved profitability.
KG Steel reported consolidated sales of 896.4 billion won and an operating profit of 431 billion won in the second quarter, reflecting year-on-year increases of 11.3% in sales and 16.9% in operating profit. The export ratio reached a record high of 53.1% in the second quarter. The depreciation of the won improved export profitability, offsetting the sluggish domestic steel demand.
Posco Holdings also reported improved results compared to the same period last year, driven by increased steel sales prices and volumes. The company recorded consolidated sales of 19.259 trillion won and an operating profit of 8.19 trillion won in the second quarter, with operating profit surging by 34.9%.
Performance varied among companies based on their reliance on the domestic market, product composition, and export ratios. Those that expanded overseas sales or secured demand from data centers, shipbuilding, and the energy sector fared relatively well.
An industry insider noted, "The current steel industry is experiencing a 'recession-type surplus,' focusing on profitability defense through export expansion and cost reduction rather than a full-fledged rebound. We expect that large-scale infrastructure projects scheduled for the second half will support steel demand and gradually improve market conditions."
* This article has been translated by AI.
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