POSCO Another 'Wait And See' Story
Stephen Simpson, CFA
Stephen Simpson, CFA
POSCO: Short-Term Risks Open Up Opportunity For Long-Term Investment
David Tristan Liu • 23 Comments
David Tristan Liu • 23 Comments
Fri, Aug. 5, 6:26 PM
- U.S. Steel (NYSE:X) +1.1% AH after the U.S. Commerce Department set final anti-dumping duties on hot-rolled flat steel from Japan, South Korea, Turkey, Britain, Brazil, the Netherlands and Australia.
- The highest anti-dumping taxes of 34.3% were imposed against Brazil's Usiminas (OTC:USNMY), with all other Brazilian producers facing 33.1% margins and ~11% anti-subsidy duties.
- The department slapped 57% anti-subsidy duties on top Korean steelmaker Posco (NYSE:PKX) and Daewoo International.
- The U.S. International Trade Commission is expected to issue a final ruling by late September.
- Earlier today, Jefferies upgraded U.S. Steel to Hold from Underperform, believing the company's earnings trajectory may see more sustained upside as longer-term contracts reset into 2017.
Tue, Mar. 15, 5:53 PM
- Argentina, where the new business-friendly Macri government has begun making sweeping changes in a bid to return the country to economic orthodoxy, has an opportunity to build a vital lithium export business, Reuters reports.
- More than half the earth's known reserves of lithium - the small but essentially irreplaceable component of rechargeable batteries, used in consumer devices like mobile phones and electric cars - are found in an area straddling Argentina, Chile and Bolivia.
- FMC Corp. (NYSE:FMC) already is producing lithium from the salt flats in northern Argentina; lithium provides a small but growing part of FMC's revenues, with forecast sales of ~$250M this year.
- Western Lithium (OTCQX:WLCDF) is working with Korea's Posco (NYSE:PKX), whose chairman was in Argentina last month to meet with Macri and begin construction of a new lithium plant, due to begin commercial production within a year.
- Chile is popular with investors for its longtime free market credentials, while the dry desert climate is optimal for lithium production; local firm SQM has long operated there, and U.S. firm Albemarle (NYSE:ALB) is muscling in on SQM's turf after spending $6B to buy Rockwood.
Wed, Jan. 27, 9:57 AM
- South Korea's Posco (PKX -0.9%) plans to sign a preliminary agreement with Iranian steelmaker PKP in March to buy a stake in a $1.6B Iranian steel mill project, Reuters reports.
- The groups signed a memorandum of understanding in September to build a plant with an annual production capacity of 1.6M metric tons in Iran's Chabahar free economic zone; with sanctions now lifted, Posco and PKP reportedly plan to sign a memorandum of agreement next month.
Wed, Jan. 20, 9:13 AM
Nov. 2, 2015, 9:16 AM| Nov. 2, 2015, 9:16 AM | 7 Comments
Jul. 17, 2015, 8:21 AM
- Posco (NYSE:PKX) says it will put on hold a $12B project to build a steel plant in India, as part of a restructuring to cut its overseas business amid a global industry slowdown.
- The South Korean steelmaker’s 12M tons/year Odisha project, which was the country’s biggest foreign investment, failed to take off because of opposition from local farmers and the failure to secure iron ore mining leases, initially promised for free to the company.
- Posco India says it had so far acquired only ~600 acres out of more than 4K acres needed for the plant.
Jul. 15, 2015, 2:47 PM
- Posco (PKX -4.2%) announces plans to aggressively exit non-core areas, saying it plans to cut its domestic operations in half and trim overseas units by 30%, as the South Korean steel producer returns to its roots and focuses on improving the quality of the steel it produces as a flood of cheap exports from China pushes prices to the lowest since at least 2003.
- Posco says it plans to reduce its overseas businesses by about a third while cutting in half the number of local units, aiming to raise EBITDA on a parent-only basis to 5T won by 2017 from 4.5T won in 2014.
- Posco says Q2 net income, excluding minority interests, fell 61% Y/Y to 198.5B won ($174M), missing the 365B won analyst consensus; Q2 sales fell 9.1% Y/Y to 15.2T won.
May 18, 2015, 8:59 AM
- Posco (NYSE:PKX) reportedly is set to sell a stake of at least 30% in its engineering and construction unit for ~1T won ($920M) to Saudi Arabia's Public Investment Fund, with a deal expected to be signed by end of this month or sometime next month.
- PKX currently operates two integrated steel mills in South Korea, as well as a joint venture with U.S. Steel in California.
Apr. 28, 2015, 9:15 AM
- The EU will impose anti-dumping duties next month on imports of grain-oriented electrical steel from five countries, Reuters reports, citing sources familiar with a European Commission proposal.
- The Commission plans to set tariffs of as much as 35.9% for Japanese imports of grain-oriented electrical steel following a complaint lodged last year by the European steel producers association, Eurofer.
- Duties also will cover imports from China (28.7%), Korea (22.8%), the U.S. (22%) and Russia (21.6%).
- Grain-oriented electrical steel is a highly-specialized product used by power producers and distributors to produce transformer cores and is made by only 16 producers worldwide, including ArcelorMittal (NYSE:MT) and ThyssenKrupp (OTCPK:TYEKF) in Europe, Posco (NYSE:PKX) in Korea, and AK Steel (NYSE:AKS) in the U.S.
Feb. 5, 2015, 9:32 AM
- POSCO (NYSE:PKX): FQ4 Net income of KRW 557B.
- Revenue of KRW 65.1T (+5.2% Y/Y).
Nov. 19, 2014, 12:26 PM
- Iron ore prices extend their historic decline, approaching $70/dry ton in a retreat to the lowest level in more than five years, as analysts rule out any Chinese restocking that typically supports prices towards the end of each year.
- The price is now at a level at which all but the three biggest low-cost producers - Rio Tinto (RIO -2.4%), BHP Billiton (BHP -3%) and Fortescue (OTCPK:FSUMF -8.8%) - are either generating losses or are struggling to break even.
- Steel stocks also are getting whacked: SCHN -5.4%, X -4%, PKX -3%, AKS -3%, CMC -2.7%, STLD -2.5%, NUE -1.6%, MT -1.3%.
Aug. 14, 2014, 9:50 AM
- South Korean steelmaker POSCO (PKX +1.4%) says it is in talks to sell its specialty steel unit to SeAH Besteel, a move that would help bolster its balance sheet.
- POSCO's 72% stake in the unit would be worth 746B won (~$730M) based on the 28,700 won/share price the unit paid for some of its treasury stock earlier this year.
May 13, 2014, 2:58 PM
- Plug Power (PLUG +7.2%) and FuelCell Energy (FCEL +8.1%) are bouncing back today after each produces announcements that keep the bears at bay, at least until PLUG issues its earnings report tomorrow morning.
- At a Wedbush conference, PLUG reaffirmed its FY 2014 guidance, expecting to ship more than 3K units, hit $70M in sales (vs. $65M analyst consensus estimate) and 25% gross margins; expects EBITDA to break even during Q2 and Q3.
- Meanwhile, FCEL said it won a new contract with Posco (PKX), South Korea’s largest steel maker and, Bloomberg notes, the company’s largest shareholder.
- Also moving up nicely: BLDP +6.6%, ZBB +3.7%.
May 13, 2014, 9:24 AM
- FuelCell Energy (FCEL) strengthens its relationship with POSCO Energy (PKX), with the companies set to work together to win multinational customers that express interest in projects in each others territory, and they'll further integrate their global supply chain.
- FuelCell has also sold 5.6 megawatts of fuel cell modules to POSCO Energy to meet growing Asian demand.
- FuelCell's shares are +3.5%. (PR)
Jan. 28, 2014, 3:12 AM| Jan. 28, 2014, 3:12 AM
Jan. 16, 2014, 7:49 AM
- Posco (PKX) names Kwon Oh-joon as its new CEO, as the South Korean steelmaker seeks a way out of a protracted global slump in the steel industry.
- Kwon has served as chief technology officer and will replace Chung Joon-yang, who resigned as CEO in November following a government tax probe that hasn't been made public.