POSCO sees January steel sales down 27 pct

South Korea's POSCO , the world's No. 4 steelmaker, expects its January steel sales to fall by around 27 percent to 1.9 million tonnes, hit by faltering demand, its chief financial officer said on Tuesday.

"We produce and sell around 2.6 million tonnes every month but sales are seen falling down to around 1.9 million tonnes this month (due to weak demand)," POSCO CFO Lee Dong-hee told reporters on the sidelines of a steel industry gathering.

POSCO plans to update its 2009 production plans on Thursday when it announces its fourth-quarter results.

Posco in talks with Toyota to supply steel

Posco, the biggest South Korean steel maker, said on Monday that it was in talks with Toyota Motor to supply steel to the world's top auto company, which is seeking to cut costs as it heads for its first-ever annual operating loss.

Posco, one of the biggest global steel makers by output, has steel supply contracts with all major Japanese car makers for their Japanese output except Toyota.
"We are in talks with Toyota on a similar deal," a Posco spokeswoman, Ko Min Jin, said.

Posco, which earns around 70 percent of its revenue in the domestic market, sells its products at a relatively low price compared to regional rivals and a weaker won currency is also helping it gain price edge in the overseas market.
"The deal is very likely as Posco is already selling steel for Toyota for production in Thailand," said Eom Jin Seok, a Kyobo Securities analyst.

"Any deal will be positive for Posco as it will add a stable customer base at a time when domestic demand for cold-rolled steel is sure to decline."
The move is also likely to help Toyota, the biggest single customer of the world's second and third largest steel firms, Nippon Steel and JFE, which trail ArcelorMittal, press for a cut in steel supply prices.

Toyota plans to halt output at its domestic plants for 11 days in February and March, while Hyundai Motor, the top South Korean top auto company, plans to cut domestic output by up to 30 percent in the first quarter as drivers put off big-ticket purchases, leaving dealers' lots full of unsold cars.
Shares in Posco were down 4.2 percent to 378,000 won in late morning trade, lagging a 1.7 percent drop in the broader market.

Thainox to halt production for 1 month on weak demand

Thainox Stainless PCL, Thailand's largest stainless steel producer, said on Tuesday it planned to stop production for one month due to weak global demand.

The shutdown would help the firm save costs at its plant in Rayong on Thailand's eastern seaboard, and allow it to carry out maintenance work, it said in a statement. It had sufficient inventory to serve the market, it added.

"However, during this period, the customers will still be able to place an order and we continue to deliver the finished products as usual as the Bangkok office and other departments not directly related to production continue to work," it said.
Thainox, Southeast Asia's largest stainless steel maker, has an annual capacity of 300,000 tonnes of stainless steel, widely used in the construction, automobile and household sectors.

Around 60 percent of its output is sold on the domestic market and the rest exported, according to the company's website. Thainox gets its raw materials, including hot-rolled coils, from abroad.

Kim Eng Securities said in a research note the company was now running at a low utilisation rate of 53 percent, mainly due to a lack of hot-rolled coils.
Thailand's Mahagitsiri family, which founded the company, recently raised its stake to 58 percent. South Korea's POSCO owns 15 percent, and other major shareholders include Nippon Steel .