POSCO falls for 4th day on grim industry outlook

SEOUL, Jan. 13 (Yonhap) -- POSCO, the world's No.4 steelmaker, fell for a 4th
straight session on Tuesday on concerns that global steel demand would not
recover any time soon.
Shares of POSCO were trading at 372,500 won (US$272) on the Seoul bourse as of
10:15 a.m., down 2.74 percent.
"The company needs to look into whether steel demand is really set to recover
given the deepening global economic slump," said Kang Sung-jin, an analyst at
Tongyang Investment Banking & Securities.
POSCO said Monday that it may have to extend its first-ever output cut through
the current quarter of the year as a deepening economic slowdown is reducing
demand from automakers and shipbuilders.
POSCO announced the first-ever output cut in its 40-year history last month,
slashing steel production by 200,000 tonnes in December and another 370,000
tonnes in January.
Hopes for a recovery in steel demand that gathered pace in recent weeks on the
back of massive government stimulus packages across the world have been dashed,
with one POSCO official saying the company could post a deficit in January.
POSCO said it expects its January steel sales to drop by around 27 percent to 1.9
million tonnes, hit by faltering demand.
"POSCO sells around 2.6 million tonnes every month, but sales are seen to be
falling to around 1.9 million tonnes this month," the official said.
POSCO is scheduled to report its fourth-quarter earnings, as well as submitting
its updated production forecast, on Thursday.
Kim Kyong-choong, an analyst at Samsung Securities, said the fourth-quarter
results may not be bad as the falling price of raw materials combined with
recovering steel prices might have helped the steel maker report a
better-than-expected bottom line.
sam@yna.co.kr
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