News Room - Steel Industry
Posted on 11 Jan 2016
POSCO expands automotive steel sales
POSCO is accelerating efforts to increase
the sale of its automotive steel products as part of a strategy to fill
in profit voids caused by an ongoing struggle in the steel industry.The
Korean steelmaker said on Sunday that it will take part in the North
American International Auto Show, which starts on Monday.POSCO plans to display about 30 advanced automotive steel materials.This
will mark the first time that a steelmaker will have set up a separate
booth at an international motor show. POSCO officials say the decision
is part of its shift to focus more on automotive products because it
expected demand for cars to improve slightly in key target markets."The
highlight of the show will be an ideal automotive body in which all our
top-notch POSCO-made steel products are used," said a company official.He said the automotive body was 26.4 percent lighter but safer than others.Products
to be exhibited include "dream material" twinning-induced plasticity
steel (TWIP), which the company began producing commercially last year
for the first time in the world.The TWIP steel is
three to four times stronger than other steel, yet 30 percent lighter
and five times easier to handle. Due to its great impact absorption, it
can improve safety when used in bumper beams.Rival steelmakers have been working on the materials but failed to produce them commercially according to POSCO. The
company will also reveal the PosM-XF, next generation TWIP with
improved forming ability, together with the recently developed 1GPa TRIP
steel.POSCO supplies its steel products to the top 15 automakers."As
the industry is struggling with falling profitability, we are closely
watching what POSCO's aggressive marketing will bring," said the company
official.Worsening situation POSCO has been in serious trouble in recent years because of external and internal factors.On
the business front, a weak steel price stemming from increased output
from China hit the company. Analysts say the industry will suffer from
oversupply again this year.Sales of POSCO products
last year are estimated to be below 60 trillion won, with an operating
profit of 2.6 to 2.8 trillion won, far worse than the previous year,
according to local analysts.Its fourth-quarter operating profit is expected to fall more than 20 percent, year-on-year.POSCO
officials say participating in the show represents the company's
commitment to differentiate itself from its chief rivals as a
manufacturer of premium products.The company is aiming to increase the share of its premium products to more than half its total sales."Out
of the 1.5 billion tons of steel production worldwide, premium products
account for only 10 percent and their prices seldom go down regardless
of market conditions," POSCO CEO Kwon Oh-joon said recently.Kwon
has been highlighting the "solutions marketing," where the company
sells not only products but also software and welding and forming
know-how.The company's marketing of automotive steel products centers on world-premium products.As a result, automotive steel plate sales increased 7 percent in 2014, topping 8 million tons for the first time in 2014. POSCO aims to increase the sales ratio of world premium products to 45 percent by the end of this year, to 50 percent in 2017."With
the aggressive solution marketing, we will lift the sales ratio of
premium products to more than 70 percent in the future, from 40 percent
now," the company official said.
