Hyundai Steel’s Blast Furnace Pays Off Big
in First Year

Operating profit jumps 79%, share price climbs 44% in 2010

For Hyundai Steel Co., April 8, 2010 should be the most memorable day in its history, as it was the day its second blast furnace went online, making the steelmaker the second proprietor of a blast furnace in Korea. Because of the new blast furnace annual sales jumped 28 percent and operating profit rose 79.4 percent YoY to 10.1 trillion won and 1.4 trillion won respectively.
The record is more astounding as it came amid a slump that hit the steel industry due to a more than 50 percent increase in the sale of hot-coil steel products produced with crude steel from the new blast furnace, while other steel products sales were sluggish. The sale of stainless steel products rose nearly 60 percent.
The steelmaker expects to have a very big year as its two blast furnaces turn out enough crude steel to produce 8 million tons of steel products annually.
The steelmaker’s excellent annual performance spread widely enough to boost the price of its shares 44 percent last year to 124,500 won per share at the end of 2010, double the 21.9 percent average increase of shares listed on the Korea Exchange last year.
The performance of Hyundai Steel shares is further surprising as the prices of shares of steelmakers fell on average 4.6 percent. What was particularly notable about its price movement was that 470,000 of its shares were bought by foreign investors, although they unloaded many other shares.
The company has been encouraged by the rise in its credit rating since the new blast furnace went online last year. At the end of 2010, the rating went up two steps to Baa3 from Ba2 by Moody’s and from BB+ to BBB-, up a grade.
The company this year will try to stabilize its second blast furnace as early as possible now that its first blast furnace is operating at full capacity. The second blast furnace, which went online in November last year, showed the potential to turn out 370,000 tons of crude steel just over a month into its operation. The company seeks to produce 4.03 million tons of crude steel this year.
In order to diversify its special steel technology, it will step up the development of steel production technology, such as steel plates for cars and 11 others by August this year, in addition to 37 other steel products including those used in ships. nw

An aerial view of Hyundai Steel plant complex in Dangjin, South Chungcheong Province.
- Photo by courtesy of Hyundai Steel