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 (NYSE:PKX) may scowl at its own numbers, posting a 69% drop in profit from a year earlier, but a look through the Foolish lens brings corroborating revelations about the relative strength of the Asian industrial complex compared with the rest of the world.

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 (NYSE:X) and Nucor (NYSE:NUE) both battened down the hatches by idling about half their productive capacity. Accordingly, Cliffs Natural Resources (NYSE:CLF) is now cutting additional North American met coal output after slicing iron ore production last quarter. Arcelor Mittal (NYSE:MT) is in a similar stance after a new round of cuts announced for European operations last week. POSCO, conversely, left 75% of capacity intact while increasing capital spending with bold plans to build two new steel mills. As companies from the top of the supply chain like mining-equipment specialist Joy Global (NASDAQ:JOYG) and iron-ore miner Vale (NYSE:RIO) observe positive indications for demand stabilization in China, it's time for Fools to dust off those atlases and pay close attention to geography.

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.

Further Foolishness:

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Fool contributor Christopher Barker has a head as thick as a double-hulled steel tanker. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of Cliffs Natural Resources and Vale. The Motley Fool has a disclosure policy. POSCO is a Motley Fool Income Investor recommendation.