Hyundai Steel Achieves Record-Breaking Performance... Balanced Growth Across Steel Plates, Rebars, and Specialty Steel (Comprehensive)

Operating Profit 545.3 Billion KRW... Sales Revenue 5.6219 Trillion KRW
Special Steel Turns Profitable, Rebar Demand Steady, Balanced Growth Across All Sectors

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Steel has recorded its highest quarterly performance ever. This success is attributed to improvements in the global steel market, recovery in demand industries, product price increases, and strategies to expand sales volume.

Hyundai Steel announced on the 27th that its consolidated operating profit for the second quarter of this year reached 545.3 billion KRW, a 3795% increase compared to the same period last year. Sales revenue also rose by 36.7% to 5.6219 trillion KRW. The operating profit margin showed remarkable growth, soaring from 0.3% in the same period last year to 9.7%, demonstrating significant improvement in profitability.

◆Strong Market Conditions Continue in the Second Half... Robust Demand in Construction, Automotive, and Shipbuilding = Hyundai Steel explained that despite some facility shutdowns in May, the company actively responded to increased steel demand by expanding production across various sectors.

Furthermore, as the recovery in demand industries is progressing rapidly, Hyundai Steel stated it will strive to stabilize supply and demand to ensure that major customers do not face steel supply difficulties. In fact, Hyundai Steel is currently implementing supply stabilization measures by minimizing downtime, including reducing major maintenance, to compensate for recent production disruptions and expand production.

In today's announcement, Hyundai Steel also expressed a positive outlook on the global steel market in the second half of the year. The company expects global economic growth to accelerate further due to vaccine distribution and economic stimulus measures centered on developed countries, anticipating a favorable trend to continue in the latter half of the year.

A Hyundai Steel official said, "Looking at industries, the automotive sector faced difficulties in the first half due to semiconductor supply issues but is expected to have entered a stabilization phase. The home appliance sector is booming, and thick plate steel is showing results exceeding shipbuilding orders compared to plans," adding, "due to the recovery trend in demand industries such as construction, automotive, and shipbuilding, steel demand is strong, and favorable performance is expected to continue for the time being."

Price increases are expected for Hyundai Steel’s core product, automotive steel sheets, for both domestic and export markets. Hyundai Steel is currently negotiating export steel sheet prices with Hyundai Kia Motors. A Hyundai Steel official explained, "We are negotiating in a favorable environment reflecting raw material price increases," and added, "In the third quarter, we will negotiate domestic steel sheet prices reflecting cost increases."

◆Special Steel Turns Profitable... Rebar Demand Remains Steady = Special steel, which had underperformed until now, has also turned profitable. Hyundai Steel expressed confidence during its earnings call, stating, "We expect the profit trend to continue in the second half, and quality issues have improved significantly, reaching a level comparable to competitors."

Earlier, in the first quarter earnings call, Hyundai Steel stated, "We expect a dramatic improvement in special steel profitability this year," and clarified that "thick plate and special steel are businesses under long-term structural adjustment review," indicating they are not subject to immediate restructuring. In the second half of this year, the strategy is to maintain profitability through cost reduction and develop products specialized for the electric vehicle market.

Regarding rebar, demand is expected to remain steady as construction sites fully resume operations after August. Addressing market concerns over the sharp rise in rebar prices, Hyundai Steel stated, "Scrap metal prices are transparently reflected, so there should be no issues with price increases."

Since 2019, Hyundai Steel has been operating fuel cell separator membrane facilities, a core component for hydrogen vehicles. This capacity can supply 16,000 hydrogen vehicles, with current sales reaching 100 billion KRW. A Hyundai Steel official said, "We plan to establish a factory producing high-output, high-spec fuel cell separator membranes in response to the increase in large hydrogen vehicles such as buses and trucks," adding, "Investment is planned for 2023 according to demand forecasts, but a detailed roadmap has not yet been finalized."

Regarding the establishment of affiliates at the Dangjin, Incheon, and Pohang sites to employ about 7,000 in-house subcontracted workers, Hyundai Steel explained, "Although costs will increase, we expect the invisible benefits from improved safety for partner company employees, labor stability, and enhanced management systems to offset the cost increases."

This content was produced with the assistance of AI translation services.