South Korean steelmaker POSCO on Thursday posted a 9 percent rise in third-quarter operating profit as a sustained recovery in steel prices lifted earnings for overseas operations including China.
The steelmaker expected a continued rise in steel demand driven by restructuring in top producer China, and revised up its consolidated sales outlook for 2017 to 59.5 trillion won ($52.9 billion), from its July forecast of 59.3 trillion won.
POSCO, the world’s fifth-biggest steelmaker, said consolidated operating profit was 1.13 trillion won ($1.01 billion) in the third quarter, up from 1.03 trillion won in the same period a year earlier and in line with an average estimate of 1.12 trillion won from analysts polled by Reuters.
Third-quarter revenue rose 18 percent from a year ago to 15 trillion won.
Capacity cuts at mills in China amid soaring infrastructure spending have propelled steel prices sharply higher. Benchmark Shanghai steel rebar futures rose 13 percent in the third quarter, extending a rebound in futures for the construction material that started in late 2015.
POSCO shares ended down 1.6 percent prior to the earnings announcement. The stock has climbed 29 percent so far this year, outpacing the wider market’s 22 percent rally.