On April 26, Hyundai Steel revealed its business performance for the first quarter of 2023.
According to the announcement, the company achieved USD 4.25 billion in consolidated sales, an increase of 11.9% compared to the previous quarter. Operating profits increased by USD 482.45 million, to reach USD 259.89 billion. The operating profit margin increased by 12 percentage points, reaching 6.1%.
In terms of production and sales performance, blast furnace production was 59.8% higher than the previous quarter, reaching 2,825,000 tons. Sales volume increased by 29.6% to 2,883,000 tons. Electric arc furnace production increased by 14.4% to 1,617,000 tons, while sales volume was up 6.4%, to 1,609,000 tons. The sales volume of mobility products, driven by steady demand in the US automobile market, rose by 10.4% to 212,000 tons.
Hyundai Steel explained that despite the increase in production and sales volume due to the normalization of operations after the previous quarter’s strike, the sales unit price decreased, resulting in a slight increase in revenue compared to the sales growth rate. The turnaround regarding the operating profit was achieved due to the resolution of one-time costs caused by typhoon damages and the increase in sales volume.
Regarding the outlook for the steel market in 2023, a decrease in construction orders is anticipated due to uncertainties in the construction industry caused by high interest rates. However, the company expects an upturn in production and sales volume in the automotive industry as production normalizes. Despite the global downturn in shipbuilding orders, Hyundai Steel has projected an increase in the order backlog due to a favorable trend for LNG ship orders from Korean shipyards.
In the area of raw materials, Hyundai Steel anticipates a decline in iron ore prices as China’s steel demand recovery has fallen short of expectations, while coking coal prices are expected to decline due to the normalization of supply disruptions from Australia. In terms of products, the price of rebar saw a slight increase despite a downturn in the construction industry, and hot-rolled coils maintained a stable trend due to a delayed recovery in demand industries. However, product prices are expected to rise gradually due to increasing manufacturing costs.