Steel prices go up, steel prices go down -- and POSCO (NYSE:PKX) carries on with its business. While this huge Korean steelmaker may not be the best at any particular aspect of its business, it's a solid all-around play for investors who want both some basic material exposure as well as some exposure to non-U.S. markets and conditions.

For POSCO, the story this quarter wasn't so much about year-over-year performance (that was negative), but rather an improvement from the first quarter. Revenue and operating income were both down from last year, but margins improved from the first quarter and pricing seems to be improving across the company's product lines. With input prices essentially locked in for the year (iron is more expensive, coking coal less) and price hikes moving through, management seemed cautiously optimistic about the back half of this year.

Part of the POSCO story continues to be about the company's efforts to transform itself. About half of the company's production is low-value commodity stuff, but management continues to work on upping the mix of strategic products in its revenue base. Recent efforts along these lines include expansion into magnesium sheet production: Given magnesium's lightweight characteristics, this could be a growth market for applications like electronics casings or car parts.

It's also tough to talk about POSCO without also referencing the Mittal (NYSE:MT) - Arcelor merger. Depending on how you read the tea leaves, companies like POSCO might get increasingly scarce as the market splits into global giants and local/regional specialists. That could well make POSCO a seller (perhaps to a Japanese entity or even a large diversified materials company like Rio Tinto (NYSE:RTP) or BHPBilliton (NYSE:BHP)) or a buyer of smaller Asian operators.

In the meantime, POSCO is still a steel company that I like a lot, though it's not my top pick today. There's a respectable dividend here -- POSCO is a Motley Fool Income Investor pick -- and few resources companies are better located to take advantage of consumption growth in China, South Korea, and India. Assuming that pricing doesn't move against it, that should continue to mean years of respectable cash flow.

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Fool contributor Stephen Simpson owns shares of Mittal, but has no financial interest in any other stocks mentioned (that means he's neither long nor short the shares). The Fool has an ironclad disclosure policy.