South Korea's Hyundai Steel produced 4.63 million mt of steel in the quarter ended March 31, down 1.9% on the year, the steelmaker said April 25, quoting non-consolidated results.

          The drop in output came as sales in the first quarter fell 5.2% to 4.7 million mt amid weaker demand.

          Despite the lower output and sales in Q1, Hyundai Steel reiterated that its steel sales for 2023 will be supported by the automotive sector although it projects lower demand from the construction sector.

          The steelmaker forecasts 2023 vehicle production at 3.75 million units, unchanged from its initial projection in January.

          Likewise, for construction orders, Hyundai Steel maintained its forecast at Won 207 trillion ($154.8 billion) for 2023, which is 7.5% lower from 2022.

          "Construction orders decreased due to high interest rates, [while] auto production and sales increased due to easing on chip supply issue," it said.

          In Q1, South Korea produced 1.06 million vehicles, a 27.1% increase on the year, data from the Ministry of Trade, Industry and Energy showed.

          Nevertheless, Hyundai Steel cautioned that the global steel industry faces headwinds due to slowing economic recovery resulting from inflation and market uncertainty such as higher interest rates.

          Steel demand is expected to come mainly from emerging countries, it said, citing economic stimulus measures in China, infrastructure investment in India and post-earthquake rebuilding activity in Turkey.

--- S&P Global Commodity Insights.