SEOUL (Reuters) - South Korean steelmaker POSCO (005490.KS) posted a 32.1% fall in its third-quarter operating profit, in line with analysts’ estimates, as higher raw material costs weighed on margins.
The company said it expects global steel demand to grow moderately in 2019, as China’s infrastructure and property market expenditures would keep its steel demand solid, despite the country’s weakened manufacturing sector.
POSCO reported a consolidated operating profit of 1.0 trillion won ($854.34 million) for the July-September period, compared with 1.5 trillion won a year earlier. Net profit for the world's fifth-biggest steelmaker dropped 53.0% to 497.0 billion won, while revenue fell 2.6% to 16.0 trillion won. (bit.ly/2JhKGfE)
Iron ore prices soared to five-year highs in July on reduced supply from top exporters Australia and Brazil. At the same time, economic growth in China, a key steel consumer, slowed to 6% year-on-year in the third quarter, its weakest pace in nearly three decades, weighed down by soft factory output amid the protracted Sino-U.S. trade tensions and sluggish domestic demand.
POSCO shares edged up 0.2% by 0447 GMT following results, while the broader market .KS11 was little changed.
($1 = 1,170.5000 won)
Reporting By Jane Chung; Editing by Himani Sarkar and Shounak Dasgupta