On October 25, Hyundai Steel shared its business performance statistics for the third quarter of 2023.
According to the announcement, the company achieved USD 4.01 billion in consolidated sales, marking a 10.6% decrease compared to the previous quarter, and USD 144.9 million in operating profits, signifying a decrease of USD 181.45 million. The operating profit margin decreased by 3.7% down to 3.6%.
In terms of production and sales performance, blast furnace production decreased by 2.4%, compared to the previous quarter, to 2,897,000 tons, and sales volume decreased by 2.1% to 2,845,000 tons. The fact that these business areas only saw slight decreases despite the slow economy can be attributed to increased sales by Korean carmakers and an increase in orders placed by shipyards.
Electric arc furnace production decreased by 13.6% to 1,546,000 tons, and sales volume decreased by 16.4%, to 1,494,000 tons, due to a lengthy rainy season and other seasonal factors as well as rising interest rates worldwide. The sales volume of mobility products, affected by stagnant demand for oil country tubular goods (OCTG), resulting from a declining number of rigs in the US, fell by 2.0% to 200,000 tons.
Hyundai Steel explained that revenue had fallen by about 10.6% from the previous quarter due to lower prices caused by a decreased sales volume and the increased import of low-priced materials, and that operating profits had also fallen from the previous quarter due to a decreased sales volume stemming from the stagnant global economy.
The steel market in 2023 was expected to be affected by the slow recovery of the construction industry in the face of unfavorable economic conditions and fewer construction projects resulting from continued high interest rates. On the other hand, increased production was anticipated in the automotive industry resulting from pent-up demand and increasing exports. In the shipbuilding industry, Korean shipyards secured 79.6% of all the current orders for high-added-value ships worldwide and now have enough large orders to keep them busy for the next 4 years.
In the raw materials sector, iron ore prices are expected to rise slightly, reflecting a stable demand stimulated by the recovery of the Chinese economy and increasing crude steel production at the onset of the peak season. Coking coal prices are expected to rise due to increased demand resulting from supply distribution in major supplying countries and increased crude steel production in India. Rebar prices are expected to see a slight decrease due to slow demand in the downstream industry and increased imports. Hot-rolled coil prices decreased this year due to the economic slowdown in the steel industry, but are expected to rebound slightly in the near future due to the recent rise in raw material prices and China’s economic recovery.
Hyundai Steel also announced that it would be working to boost sales in response to the increasing demand in the automotive and shipbuilding industries and that it hopes to achieve profit security by continuing to optimize production and inventories and improve cash flow.