South Korean Steel Exec Discusses China Steel (PKX)

| About: POSCO (PKX)
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POSCO (ticker: PKX) which manufactures and sells a line of steel products in South Korea reported Q4 2005 earnings results earlier today. The following are comments from IR Director Jae Ku Cho during management's conference call with analysts:

…the level of production by the Chinese steel mills has been increasing, especially toward the end of the year…..

….we had the last discussion this afternoon with the domestic investors…..but the problem is nobody can be sure for the statistical data for the Chinese market.

….we expect China will have the overcapacity which can cause over supply of the steel, but at the same time we are -- we noticed a sharp drop down of the price by major Chinese steel mills near to the end of last year, and we have the assumption that the current level of the steel prices is near to the cash cost, or probably below the production cost for large numbers of the producers in China.

….this time price cut by major steel producers could be guided by the Chinese government who has strong commitment to restructure the industry. So we like to be little bit positive for the further development of the -- in China of the industry in terms of the supply and the demand during this year. So as I've commented, we have opinion for the marginal recovery of these prices from the second half of this year.

(Quotes are from the CCBN StreetEvents transcript.)