POSCO Announces Second Quarter Results

Posco posted operating income of $ 848 million in Q2 2019 on sales of $ 681 billion. Sales were up 1.5 percent, but operating income and net income were down 14.7 percent and 14.7 percent year on year, respectively. The decline was mainly due to the sluggish steel business, which accounts for about 80% of total operating income. Metals business operating profit for the quarter decreased by 21% due to higher prices for iron ore

Iron Ore - Strong demand from increased steel production, coupled with supply disruptions from the Vale Dam in Brazil in January and a cyclone in Western Australia in March, have led to a restriction on the iron ore market. Non-market factors such as the overheated Chinese futures market also pushed the 2Q price down to $ 100 /t. It is expected that in the 3rd quarter, the fine ore price will be $ 100 ~ 110 per ton. While delivery terms are improving as Vale increases production, the market will remain tense as the Chinese port restocking is extended. Meanwhile, measures are expected to cool the overheated futures market, such as higher trading fees on the Dalian Commodity Exchange, which will limit the scope of further price increases.