POSCO Q3 profit jumps to over 4-year-high as China prices gain

Seoul: POSCO posted its strongest quarterly operating profit in more than four years, beating analysts` estimates, as a sustained recovery in Chinese steel prices helped boost margins for South Korea`s top steelmaker.

Steel prices in China, the world`s biggest consumer and producer, have rallied 50 percent this year as Beijing`s efforts to reduce a crippling overcapacity in the sector have led to lower inventories of the alloy in the country.

POSCO, the world`s fourth-biggest steelmaker in 2015, said on Wednesday that its consolidated operating profit rose to 1.03 trillion won ($908.79 million) in the third quarter, up from 652 billion won a year earlier and the highest since early 2012.

The operating profit figure also beat a consensus forecast of 904 billion won from a Reuters` poll of 15 analysts.

POSCO`s revenue declined 9 percent from a year ago to 12.75 trillion won, versus analysts` estimates of 13.3 trillion won.

POSCO shares ended down 0.4 percent in the wider market that declined 1.1 percent prior to the earnings announcement. The shares of the steelmaker, which fell for a sixth year in 2015, have rallied 49 percent so far in 2016, tracking higher Chinese steel prices.