Color steel plate companies likely recorded decent performance last year despite weak demand due to falling raw material prices. Color steel plates are steel products used for the outer panels of home appliances like refrigerators and washing machines, as well as for automobiles and roofing materials.
According to the steel industry on the 22nd, Dongkuk CM's revenue last year was 2.1638 trillion won, a 70.9% increase from the previous year. Operating profit also rose to 77.3 billion won, up 189.7% during the same period. The sharp increase in performance is partially due to the fact thatDongkuk CM's first half revenue from the previous year was not fully reflected after spinning off from Dongkuk Steel Mill Group in June 2023, but the operating profit margin also improved from 2.1% to 3.6%.
Other color steel plate companies are also likely to have seen an increase in operating profit. Although KG Steel, the number one company in the color steel plate industry, is projected to see a 3.7% decrease in revenue to 3.3026 trillion won last year, its operating profit is expected to increase by 24.2% to 280.4 billion won.
Last year, Dongkuk CM, the second largest domestic color steel plate provider, proceeded with the acquisition of AJU Steel to reclaim the top position in the industry. Dongkuk CM completed the merger with AJU Steel on the 7th and secured 58.29% of AJU Steel's equity on the 9th, becoming the largest shareholder. With AJU Steel's deficit management also resolved, the merger effect is expected to manifest smoothly. The estimated total revenue for Dongkuk CM and AJU Steel last year is projected to exceed 3.3374 trillion won, surpassing KG Steel.
POSCO STEELEON, the third largest company in the industry, is expected to report increases in both revenue and operating profit, with projected revenue of 1.216 trillion won and operating profit of 48 billion won last year. This represents a respective increase of 4.9% and 54.8% from the previous year.
The improvement in performance in the color steel plate industry is due to the low prices of key raw materials like hot-rolled coil (HRC). The futures price of Chinese hot-rolled coils rose to 6,288 yuan (about 1.24 million won) per 10 tons on May 10, 2021, but has since fallen continuously, dropping to 3,385 yuan (about 670,000 won) by the end of last year. The actual purchase prices for raw materials by companies are also at low levels. The HRC price fell from 1.047 million won per ton in late June 2021 to 795,000 won as of the end of September, a decrease of 24.1%.