POSCO cuts 2020 steel output, sales targets by 7%

South Korea's steelmaking giant POSCO said Friday it has lowered its production and sales forecasts for 2020 by 7% as the COVID-19 pandemic continues to ravage demand.

Crude steel production is now forecast at 34.1 million mt for the year, down 7.1% from 36.7 million mt earlier, and sales at 32.4 million mt, down 7.4% from 35 million mt earlier, the company said.

The revised forecasts came as POSCO reported its crude steel production over January-March fell 3.6% year on year and sales fell 3.5% as the company undertook upgrading and maintenance works.

POSCO's crude steel output in the first quarter was also down 5.6% from the previous quarter at 9.07 million mt, while its steel product output was down 2.7% over the same period at 8.72 million mt, and down from 9.04 million mt the year before.

Auto demand slides

Steel demand from South Korea's domestic automakers fell in Q1 as vehicle sales to the export market sank 17.6% year on year to 479,388 units, Ministry of Trade, Industry and Energy data showed.

Demand is expected to fall further in Q2 as South Korea's automakers cut production and inventories.

South Korea's other major steelmakers Hyundai Steel and Dongkuk have also reduced production days at their electric arc furnaces since Q1 due to the weak market conditions.

-- Clement Choo, Samuel Chin