While the global steel industry has gone soft, the sheriff of steel has retained a hard-nosed determination to position itself for long-term demand recovery.
POSCO earned $245 million for the first quarter despite a record-low profit margin of 5.8%. As the South Korean won slipped against a strangely stronger U.S. dollar, and demand disruptions deepened further, the world's fourth-largest steelmaker found itself pinned between rising costs and reduced sales volumes. With serious pressure mounting against the greenback, however, and further signs that Asia will witness the earliest signs of stabilizing demand, the outlook for POSCO continues to stack up very nicely against many of its global competitors.
POSCO cut production later than its rivals, and to a lesser degree. U.S. Steel
Japan announced its own stimulus plan Monday ($150 billion), and reports of increased lending activity in China exhibit tangible results from that nation's $586 billion initiative. The case for some measure of decoupling of Asian economies from those of other regions of the world, therefore, once again gains credence as the fog from the initial stage of this crisis begins to clear. Despite the obvious near-term disruptions to industrial activity in Asia, as observed everywhere else, this Fool remains keenly focused upon China and related Asian economies like South Korea as the only viable catalysts for commodity demand stabilization and eventual demand recovery.