"Demand Rises and Product Prices Strengthen" SeAH Steel's 2Q Operating Profit Increases Over 700%

Steel pipe products made by SeAH Steel at the Pohang plant.

[Asia Economy Reporter Choi Dae-yeol] SeAH Steel Holdings announced on the 17th that its consolidated operating profit for the second quarter of this year reached 108.09 billion KRW, marking a 738% increase compared to the same period last year. Sales rose by about 30% to 713.216 billion KRW, and net profit surged by 4262% to 83.187 billion KRW.

The company explained, "Due to the recovery in the North American construction and oil & gas industries, sales of major steel pipe products used in piping and the energy sector increased," adding, "Local steel prices rose, leading to a significant increase in sales and operating profit of our North American subsidiary."

It further stated, "Steady demand in the domestic construction industry continued, and with the global home appliance industry's boom, the profitability of key products from subsidiaries such as piping materials (SeAH Steel), structural pipes (Dong-A Steel), and steel plates (SeAH CM) improved, resulting in increased operating profit."

SeAH Steel Holdings has affiliates whose main products are steel pipes and plates. Even looking at SeAH Steel alone, operating profit was 36.3 billion KRW, up about 198% compared to the same period last year and about 131% compared to the previous quarter. Second-quarter sales were approximately 359.4 billion KRW, about 33% higher than in the second quarter of last year. Domestic and international steel demand greatly exceeded supply levels, leading to overall price increases and improved profitability.

The company explained, "We implemented proactive sales strategies such as raising selling prices to offset rising raw material costs and exchange rate declines," adding, "With international oil prices rising, sales of high-margin products for the energy sector increased, boosting operating profit."

The company anticipates many positive factors for the market outlook. As major countries including the United States expand infrastructure investments, renewable energy projects are increasing, which is expected to drive demand for steel used in pipes and structures. Additionally, with steel export restrictions in China, the world's largest steel supplier, the price strength is likely to continue.

The company emphasized, "Since demand, supply, and price fluctuations may become more volatile, we will continue efforts to secure profitability," and added, "We will steadily strengthen our market dominance through proactive and strategic investments in response to increased orders for offshore wind power and liquefied natural gas (LNG) projects."