SEOUL (Reuters) -- South Korean steelmaker POSCO said on Monday that it expects higher 2018 sales, supported by high Chinese steel prices and firm global demand that helped it hoist profit by close to a third in the second quarter.
The world's fifth-largest steelmaker raised its revenue outlook for 2018 to 64.1 trillion won ($56.7 billion) from its April forecast of 63 trillion won. POSCO said in a filing it expected Chinese steel prices to remain high on tighter supplies following a shutdown of old mills amid ongoing restructuring in the China steel business.
The brighter full-year forecast comes after consolidated operating profit for April-June climbed 28 percent to 1.25 trillion won from 979.1 billion won a year earlier. That was slightly below a bullish average estimate for POSCO's core earnings of 1.32 trillion won from 12 analysts polled by Reuters.
Revenue for the quarter advanced 7.6 percent to 16.08 trillion won from 14.95 trillion won a year ago, helped by rising prices. That trend showed up in Shanghai benchmark steel , up 14 percent in April-June from the previous quarter with firm demand and lower output in China.
On Monday POSCO said it expected average prices for iron ore, a key input in steelmaking, to be between $60 and $65 per tonne in the third quarter, down from $65 per tonne in the second quarter.
For coking coal, another vital raw material for the steel business, POSCO expects prices to be lower in the third quarter at between $175 and $185 per tonne, compared with $190 per tonne in the previous quarter.
POSCO shares ended up 3.6 percent prior to the earnings announcement, released after Seoul's bourse closed, outpacing the wider market's about 1 percent decline.