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Hyundai Steel Q2 net plunges 46 pct on lower China demand

2017/07/28 16:07

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SEOUL, July 28 (Yonhap) -- Hyundai Steel Co., South Korea's second-largest steelmaker by sales, said Friday its net profits plunged 46 percent on-year in the second quarter on lower demand in China.

In the three months that ended June 30, the company's net slumped to 341.1 billion won (US$304 million) from 254.6 billion won a year earlier, the company said in a statement.

"As the company's supply of automotive steel to Hyundai Motor Co. and Kia Motors Corp.'s plants (in China) has fallen sharply, it deeply cut into the quarterly bottom line," a company spokeswoman said.

Hyundai Motor and Kia Motors are two major captive buyers of the steel company's high-end automotive steel products. Hyundai Steel earns about 30 percent of its overall sales from deals with the two carmakers. The three are all key affiliates of Hyundai Motor Group.

Moreover, higher prices of iron ore and coking coal, two core raw materials used in making steel, were reflected in the second quarter, she said.

Operating profit fell 19 percent to 350.9 billion won in the second quarter from 432.2 billion won a year ago. Sales rose 11 percent to 4.69 trillion won from a little under 4.23 trillion won during the same period, the statement said.