On July 26, Hyundai Steel revealed its business performance for the second quarter of 2023.
According to the announcement, the company achieved USD 4.44 billion in consolidated sales, an increase of 4.6% compared to the previous quarter. Operating profits increased by USD 63.2 million, to reach USD 322.8 million. The operating profit margin increased by 1.2%p, reaching 7.3%.
In terms of production and sales performance, blast furnace production was 1.3% higher than the previous quarter, rising to 2.97 million tons, due to increased demand for automotive materials following the normalization of automotive parts supply. Sales volume increased by 0.7%, and was recorded as 2.905 million tons.
Electric arc furnace production increased by 8.8% to 1.79 million tons due to heightened demand in the peak construction market, while sales volume was up by 11.1%, to 1.788 million tons. The sales volume of mobility products decreased by 3.8% to 204,000 tons due to reduced demand for fuel tanks caused by the international decline in oil prices.
The steelmaker explained that despite a slight increase in sales volume compared to the previous quarter, revenue was lower by approximately 10% due to a decline in the global steel market compared to the same period in the year before. Increase in demand for automotive steel sheets and higher sales volume due to the seasonal effects of structural steel, along with product price increases, contributed to an increase in operating profits compared to the previous quarter, allowing for stable profitability.
Regarding the outlook for the steel market in 2023, a slowdown in the construction industry is anticipated, as high interest rates and tightening policies continue. However, Hyundai Steel expects an increase in production volume in the automotive industry as the supply of parts becomes normalized. In the shipbuilding industry, a rise in volume is predicted as the order backlog increases, driven by the surge in high-value orders for domestic shipbuilders, and as actual construction orders after 2020 are expected to commence in earnest.
As for raw materials, Hyundai Steel anticipates that iron ore prices will remain stable despite the decrease in China’s demand for steel, due to stimulus measures. Meanwhile, coking coal prices are expected to remain slightly stable due to increased supply from Australian mines and reduced demand from China. In terms of products, rebar prices are predicted to see a slight decrease due to the slowdown of the construction industry, with hot-rolled coils also expected to weaken due to global market decline and increased supply from China.
Hyundai Steel communicated its commitment to reinforcing product sales in line with more demand for automobiles and shipbuilding, and to securing stable profitability in the second half of the year through production and inventory optimization.