South Korean steelmakers are expected to see their earnings bounce back in the first quarter of the year on a recovery in demand and rising prices, analysts said Thursday.

The rosy outlook represents a stark turnaround from their dismal performances last year in the wake of the coronavirus pandemic that has sent global demand for steel products sinking.

According to a Yonhap News analysis of securities firms' forecasts, leading steelmaker Posco is projected to register an operating profit of 962.5 billion won ($885 million) for the January-March period.

Yuanta Securities Korea has offered an estimate of 1.1 trillion won, with Samsung Securities and Hanwha Securities forecasting an operating profit of slightly over 1 trillion won and 973 billion won each.

Posco is estimated to have posted an operating profit of 872 billion won for the fourth quarter of last year.

Posco chalked up an operating profit exceeding 1 trillion won for nine consecutive quarters through the July-September period of 2019 before its operating profit plunged to 557.6 billion in the fourth quarter of that year.

The number came to 705.3 billion won in the first quarter of 2020, 167.7 billion won in the second quarter and 666.7 billion won in the fourth quarter.

No. 2 industry player Hyundai Steel Co. is expected to record an operating profit of 112.9 billion won for the first quarter of this year, compared with 103.9 billion won for the last quarter.

The optimistic outlook for local steelmakers comes as they are scrambling to mark up product prices thanks to a rebound in demand from automakers and shipbuilders.

For instance, Posco hiked prices of its hot-rolled steel products by 70,000 won before further raising them by 80,000 won. (Yonhap)