SEOUL POSCO (005490.KS), the world's No.4
steelmaker, expects steel prices to stay firm, amid rising
concerns that falling prices in China on weak domestic
consumption may spread across the world, a senior official
"Export prices are strong and domestic steel prices are
also holding up well," Hwang Eun-yeon, POSCO's senior vice
president of marketing strategy, told Reuters late on Thursday.
"Prices may come under pressure for some time but we expect
China would take some steps to shore up domestic demand, (if it
worsens further) and help boost overall steel prices."
China's steel exports jumped to record highs in the past
two months as slowing economic growth dampened domestic prices,
forcing steel mills to go overseas in hopes of better pricing.
Global steel prices have also weakened this summer, led by
long steel products used mainly in the construction industry,
on the credit crisis and troubled housing markets.
In the latest move to shore up steel prices by global steel
firms struggling with soaring raw material costs, ArcelorMittal
(ISPA.AS), the world's largest steelmaker, said on Thursday it
was preparing to reduce production by up to 15 percent.
The steel giant said it had already cut production in
Ukraine and Kazakhstan by 15-20 percent and further output cuts
would be focused on long steel products and on Europe and the
Signs of a softening price outlook have increased in recent
months, with China's Baosteel (600019.SS) cutting prices for
cold-rolled steel products for the fourth quarter due to weak
demand from the auto and home appliances sectors.
POSCO mainly produces flat steel products such as heavy
plates, for which prices have soared on strong demand from the
Shares in POSCO, South Korea's second-largest company by
market value, rose 3.5 percent to 432,500 won by 0010 GMT,
versus a 3.2 percent gain in the broader market .KS11.
(Reporting by Miyoung Kim; Editing by Keiron Henderson and