Korean steelmakers witnessed their highest-ever profits in the third quarter this year, backed by strong sales due to surging steel prices.

On Thursday, Hyundai Steel announced a 2,374 percent jump in operating profit to 826.2 billion won ($705 million) for the July-September period via a regulatory filing.

Consolidated sales increased by 31.3 percent on-year to reach 5.86 trillion won, while the operating profit margin also increased to a record two-digit score of 14.1 percent, the company said.

“We have adjusted the prices of our product to reflect increased material costs, and also expanded sales of global premium products to improve profitability,” Hyundai Steel said in a statement.

About 43 percent of its sales came from the company’s global premium products, including steel sheets for cars, ships and high-strength steel bars, the firm said.

For the first nine months of the year, the company sold about 6.18 metric tons of the global premium products, it said.

The fall in steel output from China, the world’s top steel producer, also contributed to the strong performance of Korean steelmakers, as overall supply tightened.

In September, China churned out the lowest volume of crude steel since December 2018, as the Chinese government introduced new environment policies to curb carbon emissions.

Recovery in demand for cars, ships and construction materials have also driven the improvements in performance, according to industry officials.

Hyundai Steel cast a rosy outlook for next year, saying that the demand for steel products will continue to go up, especially in the construction, automotive and shipbuilding industries.

Earlier in the week, Posco, the world’s sixth-largest steelmaker and the market leader in South Korea, also reported the best quarterly performance in sales and earnings since its founding.

In a regulatory filing on Monday, the steelmaker said it posted a consolidated operating profit of 3.1 trillion won in the third quarter this year, up 365.7 percent on-year, as its revenue jumped 45 percent to 20.6 trillion won.

“The global steel market is expected to maintain the current level. The fluctuating coal prices might come as a variable,” a Posco official said.

“We expect the global demand for steel to grow by about 6 percent next year. Overall, the uptrend in demand is expected to be maintained.”

Posco also revised up its consolidated 2021 revenue target to 74.1 trillion won from the 66.4 trillion won it had set previously.

By Jo He-rim (herim@heraldcorp.com)