Sangsangin Investment & Securities noted on the 17th that due to sluggish domestic construction and plant demand, the domestic sales volume for SeAH Steel is expected to shrink, alongside shipping delays for some export quantities.
However, the export volume of steel pipes to the U.S. remains steady, and the local price increase is expected to offset the impact of tariffs, so profitability in energy steel pipes is anticipated to be solid. Accordingly, the investment opinion is 'buy,' and the target price is maintained at 215,000 won. The closing price for SeAH Steel on the previous trading day was 186,700 won.
Sangsangin Investment & Securities forecasts that SeAH Steel's consolidated sales for the first quarter will be 427.1 billion won, with an operating profit of 31 billion won. This falls below the previous estimates of 470.8 billion won in sales and 33.6 billion won in operating profit. Analyst Kim Jin-beom stated, "Given the tariff pressures from the Trump administration and the backlash from the local OCTG (oil country tubular goods) industry, the domestic steel pipe sector is likely to maintain a cautious stance towards expanding export volumes for the time being."
He predicted that concerns about an economic downturn due to the Trump administration's mutual tariff announcements would lead to a decline in oil prices, impacting OCTG demand. Analyst Kim stated, "As securing profits for development companies is crucial for sustained investments in oil wells, concerns about economic recession and uncertainty, along with sanctions on Iranian and Venezuelan crude oil, will significantly influence future oil prices and the direction of the league."
He also said, "There is a possibility that recent concerns about an economic recession may gradually be alleviated," adding, "Thus, I maintain a positive outlook on the U.S. OCTG industry."