[Click eStock] POSCO Holdings, Q3 Earnings... Improved Compared to Previous Quarter

NH Investment & Securities analyzed on the 2nd that POSCO Holdings' third-quarter earnings are expected to increase compared to the previous quarter due to sales volume recovery following the completion of blast furnace maintenance and improvement in mill margin resulting from a decrease in steelmaking costs. The target stock price was maintained at 510,000 KRW, and the investment opinion was kept as 'Buy.'

Lee Jae-kwang, a researcher at NH Investment & Securities, stated in a report released that day, "The announcement of the People's Bank of China lowering the reserve requirement ratio is expected to improve steel demand," adding, "If steel demand in China improves as expected, it will lead to a decrease in China's steel exports, which will act as a factor driving steel price increases."

He also anticipated that lithium prices would rise due to supply restrictions. Researcher Lee explained, "Considering the global production cost (10?15 USD/kg), the current lithium price (10 USD/kg) will suppress future supply increases," and added, "In other words, producers are likely to halt capacity expansion and postpone expansion plans until prices are maintained above 15 USD per kg, which is the upper limit of the industry's cost curve."

POSCO Holdings' third-quarter operating profit (separate basis) is expected to be approximately 500 billion KRW, a 20% increase compared to the previous quarter. The researcher said, "Considering that the domestic hot-rolled coil price averaged 22,000 KRW per ton and the Chinese hot-rolled coil price fell by 52 USD, while steelmaking costs decreased by 47 USD (iron ore 12 USD, coking coal 39 USD), the mill margin is estimated to have slightly improved," adding, "Additionally, this is due to the sales volume recovery following the completion of blast furnace maintenance (estimated 7.86 million tons in Q2 → 8.5 million tons in Q3)."