Dongkuk posts further loss amid ‘difficult environment’

South Korea’s Dongkuk Steel has reported an operating loss of 19.2 billion Won ($18.5 million) in the second quarter as sales volumes and prices continued to be affected by a “difficult” market environment.

August 26, 2014

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This was the second consecutive period the steelmaker posted a loss, following an 18.2-billion Won ($17.5 million) negative result in the first quarter.

Dongkuk sold 947,000 tonnes of long steel in April-June, up from the 913,000 tonnes shipped in the corresponding period of 2013 and the 774,000 tonnes dispatched in January-March this year.

But shipments of plates, which Dongkuk considers its “anchor product”, dipped to 421,000 tonnes from 514,000 tonnes in the second quarter last year and 431,000 tonnes in the first quarter of 2014.

Signs of recovery in plate demand continue to be seen in South Korea, but domestic competition remains tight, the company noted.

At the same time, steel imports have been increasing this year in South Korea, while exports have been facing competition, especially from China.

Dongkuk’s sales revenues reached 962.3 billion Won ($927 million) in the second quarter, down from 1.08 trillion Won ($1 billion) last year.

The company, however, reported a net profit of 29.2 billion Won ($28 million) in the period, which compares to net losses of 88.2 billion Won ($85 million) in the second quarter last year and 49.9 billion Won ($48 million) in the first quarter of 2014.

South Korea’s third-largest steelmaker, Dongkuk produced 846,000 tonnes of crude steel in April-June this year, up from 819,000 tonnes in April-June last year and 799,000 tonnes in January-March this year.