Posco to Raise March Utilization Rate to About 85%

By Sungwoo Park

March 12 (Bloomberg) -- Posco, Asia’s third-largest steelmaker, will raise its overall plant utilization rate to about 85 percent this month from January and February levels because of a seasonal pickup in demand and falling inventories.

Still, the rate will rise “only slightly,” Choi Doo Jin, a spokesman for the Pohang, South Korea-based company, said by phone today, without giving comparative levels.

Posco slashed production in December for the first time in its 40-year history, joining moves by ArcelorMittal and Nippon Steel Corp., the world’s biggest steelmakers, as the global recession cooled demand. Posco’s utilization rate is superior to its peers, JPMorgan Chase & Co. said.

“We only hope this trend will lead to a recovery in the economy ultimately,” Posco’s Choi said.

Posco declined 1.1 percent to 345,000 won at 12:33 p.m. in Seoul trading today, matching the 1.2 percent loss in the benchmark Kospi index.

The company today also said it is considering a bond sale. Chief Executive Officer Chung Joon Yang said on Feb. 27 Posco will cut output by as much as 800,000 tons between January and March.

Posco’s higher utilization rate may help it post “superior and stable” earnings in the first quarter, JPMorgan analysts including Park Wan Sun said in a report dated March 11.

To contact the reporter on this story: Sungwoo Park in Seoul at spark47@bloomberg.net.