POSCO cuts 2014 sales and investment forecasts on weak steel demand

South Korean steelmaker POSCO cut its sales and investment guidance for this year after its first-quarter profit fell short of preliminary estimates, as the Chinese economy slows down, which is holding back steel demand.

The world's fifth-largest steelmaker, like its competitors, is struggling for profits in an oversaturated market and lackluster demand. China, the world's largest steel producer and buyer, has determined that its economy will continue to grow, but at a slower pace than in the past 18 months, and the government has also ruled out any major stimulus plans. In addition, lending is limited, preference is given to large and progressive industries. These factors are putting pressure on steel demand prospects from producers.

POSCO is expected to cut its sales for this year from forecast by about 2 percent to $ 30.3 trillion. KRW from the previous 31 trillion. KRW. Its investment plan was also revised down more than 16 percent to 3.1 trillion from KRW 3.7 trillion.

POSCO's operating income fell 11 percent to 518 billion won in the January-March quarter, below the 531 billion won forecast. This is down from 581 billion won in operating profit a year earlier, but up from 488 billion won in the previous quarter. Its sales in the first quarter also fell 4 percent to $ 7.4 trillion. KRW from a year earlier.