Hyundai Steel's Q1 results weak, demand soft

South Korea's Hyundai Steel posted a first-quarter steel production fall of 1.1% from the fourth quarter at 5.09 million mt, which was down 4.5% from the same period a year earlier, the steelmaker said Friday.

Electric arc furnace production contracted further during Q1 and contributed 42.4% to overall production, down a touch from 43.4% in Q4. This also was down from the 44.9% achieved during the same period a year ago.

Hyundai said the COVID-19 pandemic has impacted financial and other markets, resulting in a global economic downturn.

The company expects global steel demand to plunge in 2020 due to an industry slump, but expects a possible recovery basis on level of stimulus measures in major economies, the steelmaker said.

Due to the weak market, Hyundai swung to a Q1 net loss at Won 89 billion ($72 million) against a net profit of Won 94 billion during Q1 last year. The company saw a total year operating profit in 2019 of Won 278 billion, a 70% decline from 2018.

It expects a downturn in global flat steel prices due to market uncertainty, while long steel prices are expected to recover due to "stable inventory balance and market normalization."

On Wednesday, the South Korean government announced a Won 35 trillion top up to the Won 100 trillion worth of coronavirus crisis stimulus packages to help the country’s worst-hit industries.

-- Samuel Chin, Clement Choo