Chairman Choi Jeong-woo of POSCO. (Photo: POSCO)

POSCO posted a record operating profit in the third quarter this year of 1.531,1 trillion won, up 36 percent YoY and the largest in seven years, the steelmaker said on Oct. 23.

The 3rd quarter operating profit will go down as the largest since the 2nd quarter of 2011. The 3rd quarter sales amounted to 16.410,7 trillion won, up 9.1 percent YoY, exceeding the estimated 15.956,2 trillion won. Operating profit had been estimated to come in at 1.439,3 trillion won.

The 3rd quarter operating profit also exceeded for the 5th time 1 trillion won, which the company attributed to the outstanding records in such key sections as domestic steel products, steel products for construction, and energy, with every operational sector showing very good results.

The steel maker also said Krakataw POSCO, its Indonesian subsidiary, logged a record 3rd quarter operating profit since it came on stream in 2013, at 6.3 billion won.

The steel maker boosted its sales projection by 2.9 trillion won to 648 trillion for this year, encouraged by the operational results thus far this year up to the third quarter.

The demand for Korean steel products is expected to rise with the steel industry in China going through structural reform.

Established in 1968, Pohang Iron and Steel Company (POSCO) operates two integrated steel mills in South Korea and a joint venture with U.S. Steel (USS-POSCO) in California. According to the World Steel Association, POSCO was the world’s third biggest producer of crude steel in 2010 (after ArcelorMittal and Baosteel), manufacturing over 30 million tones.

President Park Tae-joon founded POSCO in 1968 with the stated goal of developing modern steel production in Korea. The company began manufacturing crude steel in 1973, and by 1983 POSCO’s annual production was over 9 million tons.

During the 1970s, POSCO expanded and integrated upstream and downstream operations to include everything from iron smelting to steelmaking and manufactured steel production plants. The company also founded the Pohang University of Science and Technology, and invested in other research and development ventures.

In 1994, the first two POSCO subsidiaries were created. POSTEEL manages domestic sales and services and POSTGRADE manages international trading of products. Currently, POSCO has over 26 subsidiaries.

The company was fully privatized in 2000 and, consequently, began expanding into overseas markets and investing more in foreign automotive and appliance production.

POSCO manufactures six major types of steel products (approximate sales percentages 2010 are included in brackets):

Cold-Rolled Steel/Galvanized Steel (40% of sales): used in automotive plates, home appliances, furniture, etc.

Hot-Rolled Steel (24% of sales): used in pipes, beams, automotive frames/wheels and containers.

Steel Plates (15% of sales): used in ships, bridges, large structures, shipbuilding plates, etc.

Wire Rods (6% of sales): used in bridge wire, tire cords, architectural structures, springs, etc.

Stainless Steel (5% of sales): used in kitchenware, medical devices, buildings, chemical facilities, car parts, etc.

Electrical Steel Plates (3% of sales): used in current transformers, motors, power generators, etc.

Electrical Steel Plates (3% of sales): used in current transformers, motors and power generators.