Seoul: POSCO Holdings Inc., the holding company of South Korea's leading steelmaker POSCO, reported a significant drop in its first-quarter net profit, which plunged by 44.3% from the previous year. This decline is primarily attributed to a prolonged downturn in the steel industry.
According to Yonhap News Agency, the company's net profit for the three months ending in March decreased to 340 billion won (US$237.8 million), down from 610 billion won during the same period last year. The regulatory filing also showed a 1.7% decline in operating profit, falling to 570 billion won from 580 billion won. Sales also saw a reduction of 3.4%, declining to 17.44 trillion won from 18.05 trillion won.
Further compounding the company's challenges are the sweeping tariffs on steel imports imposed by U.S. President Donald Trump. The administration began enforcing a 25% tariff on all steel imports on March 12, aiming to reduce trade deficits and promote domestic manufacturing.
In response to the tariffs, POSCO Group has announced its participation in Hyundai Motor Group's steel mill project in the United States. Hyundai Steel Co. recently disclosed plans to invest US$5.8 billion in an integrated electric arc furnace-based steel mill in Louisiana, with production set to begin by 2029.
POSCO anticipates that its partnership with Hyundai Motor Group will aid in achieving sustainable growth in areas ranging from steel to rechargeable batteries. This collaboration seeks to leverage synergies between the two companies amid global trade challenges and an evolving industry landscape.
Since Chairman Chang In-hwa took office in March 2024, POSCO Group has been reorganizing its business portfolio to concentrate on steelmaking, energy materials, and new ventures under its "2Core+New Engine" strategy. A focal point for the company is securing local production facilities in high-growth, high-profit markets such as the U.S.