South Korean steelmaker Posco estimated that its first-quarter net profit more than doubled to Won800bn ($720m), heralding another strong year for global steel mills.

Operating profit for the steelmaker, the fifth-largest in the world, jumped more than 80 per cent to about Won1.2tn in the first three months of this year, it estimated in a regulatory filing, as steel prices were hovering near the highest level in more than three years. Sales were estimated to have increased 17.2 per cent to Won14.6tn.

The upbeat preliminary earnings guidance came amid growing hopes for the industry’s strong turnaround after steel prices began to recover last year from a six-year decline.

Steel prices in China, the world’s biggest consumer, have jumped 16 per cent so far this year as Beijing steps up efforts to reduce production capacity and increase infrastructure spending. Posco raised prices of its main products in recent months, reflecting higher raw material costs.

Shares of Posco closed down 0.9 per cent on Thursday before the estimates were announced. The shares have gained about 10 per cent year to date after surging 55 per cent last year. Company chairman Kown Oh-joon, who has spearheaded the company’s tough restructuring to improve its balance sheet, was reappointed for another three-year term earlier this month on the back of the strong performance.

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