* Q1 operating profit 518 bln won vs 531 bln won consensus
* Cuts sales, investment plans
* Shares close flat prior to earnings announcement
By Hyunjoo Jin
SEOUL, April 24 (Reuters) - South Korean steelmaker POSCO on Thursday cut forecast for sales and investment for this year after its first quarter profit missed estimates as China’s slowing economy curbed demand for steel.
The world’s fifth-biggest steelmaker, like its peers, is struggling with an oversupplied market and lacklustre demand.
China, the world’s biggest steel buyer, saw its economy grow at the slowest pace in 18 months in the first quarter and the government has also ruled out any big stimulus plans, weighing on the demand outlook for steel from manufacturers.
POSCO cut its sales forecast for this year by around 2 percent to 30.3 trillion won from the previous 31 trillion won, it said in an earnings statement.
Its investment plan was also revised down by up to 16 percent to 3.1-3.3 trillion won from 3.7 trillion won.
POSCO’s operating profit fell 11 percent to 518 billion Korean won ($498.29 million) in the January to March quarter, below a consensus forecast of 531 billion won from Thomson Reuters I/B/E/S.
This compared with 581 billion won in operating profit a year earlier and 488 billion won the preceding quarter.
Its sales in the quarter also fell 4 percent to 7.4 trillion won from a year earlier.
Baoshan Iron & Steel Co Ltd (Baosteel), China’s biggest listed steelmaker by market value, said last month that it expected no significant improvement in the industry’s prospects this year after posting a 42 percent fall in net profit for 2013.
In January, POSCO had said it expects its operating profit to remain nearly flat this year from 2013, its third straight year of profit decline.
Chief Executive Kwon Oh-joon, who took office in March, said he will restructure non-core businesses and avoid any major investments to increase steelmaking capacity.
POSCO, facing growing competition at home from smaller rival Hyundai Steel, is seeking to expand production abroad. In December, it started production from a steel mill in Indonesia, but that unit is unlikely to turn in a profit this year, CEO Kwon had said.
Before the earnings announcement, shares in POSCO, in which Warren Buffett’s Berkshire Hathaway owns around 5 percent, ended flat versus the market’s 0.1 percent fall. (Reporting by Hyunjoo Jin; Editing by Miral Fahmy)