[Concall] POSCO Holdings "Steel Market, Turning to Recovery in Q2... Gradual Uptrend Expected"

2022 Performance Announcement

[Asia Economy Reporter Choi Seoyoon] POSCO Holdings stated during the Q4 earnings conference call held on the 27th that regarding this year's steel market, "As forecasted by the World Steel Association in October last year, global steel demand is expected to grow by about 1% this year, slightly exceeding 1.8 billion tons."

They added, "In the first half of this year, the trend of additional interest rate hikes in major countries such as the US and Europe and the recession that began last year are expected to continue," and said, "From the perspective of steel demand industries, global supply chain issues such as the Russia-Ukraine war and vehicle semiconductor supply problems will continue to act as limiting factors for demand recovery following last year." They further noted, "However, increased inflation costs and steel raw material burdens are expected to act as factors for steel companies to raise prices despite sluggish real economy in the first half."

For the second half of the year, they anticipated that the global steel market would enter a recovery phase due to adjustments in the pace of tightening, economic stimulus measures by various countries, and the recovery of the Chinese economy. POSCO Holdings stated, "If China achieves early herd immunity, resolves COVID-19 risks, and the Chinese government's large-scale economic stimulus takes effect, the market is expected to shift to a recovery trend from the first or second quarter, showing a gradual upward trend in the steel market after the first half."

Regarding the Chinese real estate market, which affects steel demand, they said, "Due to regulatory policies initiated by the Chinese government in 2021, it was initially forecasted that the sluggishness would continue this year as well following last year," but added, "Currently, liquidity of real estate companies is improving, and through various government economic stimulus measures such as easing of COVID-19 lockdowns and increased financing costs, gradual recovery is expected."

POSCO Holdings also mentioned, "The Chinese government announced 16 real estate stimulus measures last October, which Bloomberg has evaluated as the strongest real estate market relief package issued by the Chinese government so far," and said, "This confirmed the strong will of the Chinese government. If the real estate market enters a recovery phase as intended by the Chinese authorities, an increase in steel demand for construction in China is expected."