Korean steel maker, POSCO (PKX - Free Report) recently announced the completion of the construction of a stainless cold-rolled plant, the first of its kind in the Izmit Industrial Complex in Turkey.
The plant, POSCO ASSAN TST, will have annual production capacity of 200,000 tons of steel and besides distribution within the country, will open the gates to several growing markets including the European, Middle East, Russia, CIS, and North Africa regions for POSCO.
POSCO’s presence in Turkey will prove vital for its growth due primarily to absence of any other steel producing facility in the region and presence of many well-renowned automobile companies including Renault, Fiat, Ford, Nissan, and Honda as well as major home appliance companies in Europe.
Prospects are bright for the steel industry as concerns related to the Eurozone crisis and instability in the U.S. and China are abating gradually. This in turn has increased demand for better infrastructure and modernized farming techniques. According to the World Steel Association’s projection in Apr 2013, estimated global consumption of steel is likely to grow 2.9% in 2013 and 3.2% in 2014.
The Zacks Consensus Estimate for 2013 and 2014 are at US$8.35 per ADR and $9.36 per ADR, representing a year-over-year growth of 17.8% and 12.1%, respectively.
POSCO currently has a market capitalization of $5.8 billion and is the world’s third largest steelmaker on the basis of output. The stock currently carries a Zacks Rank #3 (Hold).
Other stocks to watch out for in the industry are Nippon Steel & Sumitomo Metal Corporation , with a Zacks Rank #1 (Strong Buy) while Angang Steel Company Limited and Ternium S.A. (TX - Free Report) , each have a Zacks Rank #2 (Buy).