SEOUL, July 16 (Reuters) - POSCO, the world’s fourth-biggest steelmaker, expects its earnings to deteriorate in the second half of this year and believes that any possible Chinese stimulus policies will not be much help in reviving the struggling steel sector, a top executive told Reuters.
He told Reuters it would be difficult for the South Korean company to achieve a quarterly operating profit of more than 1 trillion won ($869.34 million) in the two quarters of the second half of this year.
“We see the steel market situation getting worse. The third quarter will be difficult and the fourth quarter could be more difficult, and we are preparing for that possibility,” the executive told Reuters on condition of anonymity because he was not authorised to talk to the media.
South Korea’s POSCO, backed by billionaire investor Warren Buffett, is expected to post an operating profit of around 1 trillion Korean won for the April to June period on a parent company basis, according to recent analysts’ estimates, compared with 1.5 trillion won a year earlier.
“The steel market recovery will depend on how China will stimulate the economy. But it is difficult to expect much from China’s policy,” he said.
China’s grew at its slowest pace in more than three years in the April to June period, leaving the world’s No.2 economy on track for its slowest full year of growth since 1999. ($1 = 1150.3000 Korean won) (Reporting by Hyunjoo Jin; Editing by David Chance)