【Ferro-alloys.com】:Korea's leading steel companies are going through a difficult period in the first quarter of this year. Leading names in the industry such as POSCO, Hyundai Steel and Dongkuk Steel experienced significant decreases in their performance.

According to Dongkuk Steel's statements, it was stated that its sales decreased by 17.4% to 927.2 billion KRW (672 million USD) in the first quarter of this year compared to the same period last year. The company said it was facing a worsening economy in the construction industry and reduced demand in its heavy plate division.

POSCO Holdings' performance showed a similar trend. The company experienced a 6.9% drop in sales and a 17.3% drop in operating profit in the first quarter. In the main steel section, sales decreased by 2.07% compared to the previous year, while there was no significant change in operating profit.

Although Hyundai Steel's performance has not been announced yet, analysts predict that the company is going through a difficult period. The company's operating profit is expected to decrease threefold compared to last year, falling to 107.3 billion won (77 million USD).

The downturn in the performance of Korean steel companies seems to have been influenced by the stagnation of the local construction market and the decrease in demand from China. In addition, the entry of cheap Chinese and Japanese steel products into the country negatively affects profitability, as increases in raw material prices are not reflected in product prices.

Sector remains hopeful that the recovery may begin in the second quarter. The China Iron and Steel Association's call to reduce production and signs of revival of the Chinese economy increase optimism in the sector. In particular, the manufacturing industry purchasing managers' index reaching its highest level in the last six months has a positive impact on the expectations in the sector.

However, the future of the sector still remains uncertain and its course in the coming period will be closely monitored.

• [Editor:Alakay]