POSCO Cuts Investment and Sale Forecasts for 2014

SEOUL (Scrap Monster): POSCO, South Korean Steelmaker cut this year’s sales and investment forecast. POSCO cut down its sale forecast by 2 percent to 30.3 trillion won from 31 million won of previous year. It also cut it investment forecast by 16 percent to 3.1-3.3 trillion won from the previous 3.7 trillion won.

The company decision to slash the forecast came after its quarterly results failed to meet expectations. The slowdown in Chinese economic growth resulted in a sharp drop in steel demand in the country.

China faced its 18 month slowest pace of economic growth during the first quarter. The government has put on hold big stimulus plans considering the weak steel demand projected by manufacturers.

The company is now greatly facing the problems of lackluster demand and oversupplied market. Its operating profit also plunged 11 percent to 518 billion Korean won in the first quarter. Sale during the quarter also decreased 4 pct to 7.4 trillion won from the previous year. According to industry sources, POSCO is planning to restructure non- core deals and postpone some major investments to boost its steel capacity.