South Korean steel giantr Posco has reported quarterly operating loss in the second quarter for the first time in two decades after the prolonged COVID-19 pandemic has dragged down both global steel demand and prices. Posco said that it swung to an operating loss of KWR 108.5 billion (USD 91 million) on a separate basis in the April-June period from an operating profit of KWR 458.1 billion won in the previous three months and KWR 724.3 billion won in the same period last year. It is the first operating loss for Posco since it started reporting its earnings to a regulatory filing in 2000.Sales on a separate basis reached KWR 5.88 trillion, down 16 percent on quarter and 21 percent on year, while net profit plunged 98 percent on quarter and 99 percent on year to 6.6 billion won.

Posco’s poor earnings in the second quarter were mainly due to a delayed recovery in steel demand as the coronavirus crisis has continued. The weak steel demand has weighed on steel prices, taking a toll on the company’s mainstay steel business. The soft steel demand led Posco’s crude steel production to shrink 1.27 million tonnes, related items production 870,000 tonnes, and sales volume 850,000 tonnes.

An official from Posco said that the company aims to improve profitability in the second half of this year by expanding sales of high value-added products such as giga steel and increasing exports to regions that have successfully contained the virus, such as China. Posco forecast demand for automotive steel products to increase 10 percent in the third quarter from the April-June period. It also expected overseas subsidiaries in China, Vietnam, Turkey, and Thailand to report improved earnings from the third quarter.