POSCO Q4 RESULTS BELOW EXPECTATIONS

The Korean steel company POSCO has reported 619 MUS$ profit in Q4-2011. This results is 33% below expectations, but better than Q4-2010.

Same tendency has been reported by BaoSteel and JFE Holdings.

Declining profits are due mainly to raw materials price increase. Posco has not been able to increase prices for Q1-2012 due to internal competition with Hyundai Steel, supplying to Hyundai Auto.

As reported by  Prf. Nouriel Roubini of  New York University Stern, China growth for 2012 is expected to be situated below 8%. In such an scenario, ore prices has to go down, because there is no chance to transfer steel cost increase to industry buyers.