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SEOUL (Reuters) - POSCO (005490.KS), the world's third-biggest steelmaker and backed by billionaire investor Warren Buffett, cut its 2011 investment plan and painted a dim outlook after posting a 6 percent rise in quarterly profit that met market expectations.
The outlook from POSCO,parajumpers stavanger, which kicks off the earnings reporting season for major Asian steelmakers such as Baosteel (600019.SS) and Nippon Steel (5401.T),parajumpers jakke, bodes ill for the sector.
Although prices of raw materials such as iron ore and coking coal are softening, weakness in developed economies and tight credit conditions in China are expected to weigh on steel prices.
"Unless the global economy gets better and sparks demand, POSCO's steel business will stagger for at least two to three years, pressured by low-end Chinese products, global oversupply and its domestic rival Hyundai Steel growing fast," said Kim Se-hoon,parajumpers no, a fund manager at Assetplus Investment Management, which owns POSCO shares.
The company, which trails ArcelorMittal (ISPA.AS) and Baosteel (600019.SS), said on Friday its July-September operating profit was 1.09 trillion won ($951.8 million),Moncler Dunjakke, versus an average 1.15 trillion won forecast from analysts,moncler jakke dame, according to Thomson Reuters I/B/E/S.
The profit edged up from 1.03 trillion won a year ago, thanks to higher sales volume and prices, but fell from 1.5 trillion won in the previous quarter because of higher raw material costs, POSCO said.
BLEAK Q4 EARNINGS
POSCO Chief Financial Officer Choi Jong-tae said the steelmaker's fourth-quarter operating profit may decrease to below 1 trillion won and that steel prices are expected to fall until the first half of next year,parajumpers 2013.
"I expect our fourth-quarter earnings to be the worst among this year," Choi told analysts after its earnings announcement.
He also said the firm's capital expenditure is unlikely to rise next year, after it slashed this year's investment plan by 18 percent to 6 trillion won.
POSCO said it expected global steel prices to remain weak because of an oversupply, while demand growth is seen slowing due to sluggish economies in advanced countries and China tightening.
"At home market, Korea turned into a net steel exporter because volume growth outpaced steel consumption growth...Demand decline is expected to continue in the second half because of sluggishness in major industries," POSCO said in a statement.
The weak won is also set to increase costs of imported raw materials for South Korean steelmakers in the fourth quarter.
The won, one of the region's most vulnerable currencies to global turmoil, lost more than 9 percent against the dollar in the third quarter and is widely expected to remain under pressure over the coming months as global economic jitters dampen investor appetite for riskier assets.
POSCO raised its cost-cutting target to 1.4 trillion won for this year, from the previous 1 trillion won.
Shares of POSCO, in which Buffett's Berkshire Hathaway (BRKa.N) (BRKb.N) owns around 5 percent stake, have fallen 26 percent this year, compared with a 10 percent drop in the broader market .KS11.
POSCO shares ended up 0.3 percent prior to the result on Friday, versus a 1.8 percent gain in the wider market.
($1 = 1145.200 Korean Won)
(Additional reporting by Ju-min Park, Tae-yi Kim and Yoo Choon-sik; Editing by Jonathan Hopfner and Muralikumar Anantharaman)

WASHINGTON (Reuters) - The United States is courting calamity with the continuing stalemate in Congress over raising the country's debt limit, the World Bank's chief warned on Friday.
 
"Whatever the logic about the tactics, it's a very dangerous environment," Robert Zoellick told a meeting of the Society for International Development,moncler harrods, adding that people were "playing with fire."
"To be blunt, to have a debt default in the United States would not only be a financial calamity but it should be an embarrassment for every American" he said.
Unless the $14.3 trillion debt ceiling is raised by Tuesday, the United States will lose its ability to borrow and start to run out of cash to pay its bills.
Efforts to avoid an unprecedented debt default suffered a new blow on Thursday when some fiscally hard-line Republicans blocked a budget deficit plan proposed by their own congressional leaders,parajumpers norge.
On Friday, President Barack Obama said he was ready to work with top Democrats and Republicans through the weekend to get a debt ceiling accord.
Zoellick,parajumpers salg, who served in both Bush administrations, said the political standoff in Washington came at a dangerous time in the world economy,Parajumpers Jakke Salg, when the euro zone faced serious fiscal difficulties and Japan was struggling with low growth and damage from an earthquake and tsunami.
"So you have an environment that's already fragile and uncertain ... and in an environment where the tools people used in 2008 of spending policies and monetary policy have basically run their course," he added.
With a triple-A credit rating, the World Bank raises most of its funds for credit-worthy middle income on international capital markets and most of its borrowing is in U.S. dollars.
Zoellick said the World Bank was a "very secure and sound" financial position, but like other financial institutions it was making contingency plans in case of a U.S. default or credit downgrade.
He noted later that his remarks were aimed at reminding lawmakers that their actions had repercussions beyond the United States,Moncler Dunjakke.
"Every financial institution in the world has to try to think through "what if's,parajumpers oslo," Zoellick added.
(Editing by Chizu Nomiyama)

LONDON (Reuters) - Britain's economy is likely to get steadily weaker through the rest of this year, and the Bank of England's future decisions on asset purchases will be largely driven by overseas developments, BoE chief economist Spencer Dale told Reuters.
In his first public comments since the BoE's Monetary Policy Committee surprised markets by launching a second round of quantitative easing last week,parajumpers jakke, Dale said that Britain was suffering one of the worst ever periods of financial turmoil.
Britain's economy has largely stagnated for the past 12 months, and Dale said the deepening euro zone debt crisis had increased the downside risks to inflation further down the line.
Asked if the 75 billion pounds of gilt purchases over the next four months that the MPC approved last week would be enough to help Britain's economy turn the corner,parajumpers 2013, he said: "I think it will depend critically on what happens in our economy but even more importantly in the rest of the world."
"The main reason why our economic outlook has deteriorated very substantially over the past few months is what's happening in the rest of the world, and therefore, how we will set the stance of policy going forward," he added.
Dale said the failure of euro zone leaders to tackle Greece's debt crisis had been a major factor behind a downward spiral in global economic confidence, and that the BoE would be keeping a close eye on future developments.
His downbeat view of the economy was reinforced by official data published after the interview showing unemployment rose to a 17-year high in the three months to August.
QE QUESTIONS
Until August this year Dale had been in a minority of MPC members who supported higher interest rates. He declined to confirm if he had backed last week's expansion in QE,kjøpe moncler, saying this would become clear in the MPC minutes next week.
He endorsed BoE Governor Mervyn King's assessment that the financial crisis was the worst since the 1930s, but stressed that conditions in the economy as a whole were better.
"I can't think of any obvious period in history where we've seen such an acute and prolonged period of financial turmoil. But I think what's very different now to the Great Depression is what's happening in the real economy."
Analysts said Dale's insistence on drawing a distinction between the current downturn and the economic depressions of the past suggested he may have been reluctant to vote for the extra stimulus.
"Our forecast is that it will be unanimous (the vote for QE) but if anybody did dissent,Parajumpers Jakke Salg, then Spencer would be one of the prime candidates," said Simon Hayes, economist at Barclays Capital.
"He thinks fundamentally that while the position of the household sector is weak,moncler jakke dame, it's not in critical need of support. And they've expanded QE because they want to keep inflation around 2 percent, not because they're worried about inflation going negative."
Dale still saw upward inflation pressures and said September's consumer price inflation, due to be reported next week, was highly likely to have jumped above 5 percent from its current level of 4.5 percent.
Notwithstanding this, inflation was likely to fall sharply at the start of 2012 due to one-off factors from higher sales tax and oil prices dropping out of the picture, and the latest economic weakness had added to downward pressures, he said.
"The ultimate judge of the success of QE is whether we hit the inflation target -- so in a couple of years' time whether we've managed to support demand and we've hit the inflation target," he said. "I will keep on emphasizing this."
The effect of high inflation in reducing households' disposable income had been a major factor behind disappointing growth over the past year, he added.
"A big feature of the weakness of growth this time around isn't something related to the financial crisis and a 'lost decade', but that households' real incomes are being squeezed by increases in imported commodities and other imports prices," he said.
WILL QE WORK?
Dale saw some grounds for why this round of quantitative easing may be more effective than the previous 200 billion pounds of asset purchases conducted between March 2009 and February 2010.
Investors' preference for safe-haven assets is even more marked than when the BoE started its first round of QE, and the BoE's gilt purchases should encourage the funds that hold them to diversify into riskier, higher-return assets such as corporate bonds and equities,Moncler Dunjakke, Dale said.
He rejected the notion that banks would sit on any money they receive from quantitative easing and would not lend it on.
"This is one thing that frustrates me more than most, when I see descriptions of quantitative easing working through the banking systems as us 'giving money to the banks'. That is not the way quantitative easing works. We go round the banking system," he said.
Dale welcomed finance minister George Osborne's proposals for 'credit easing' measures to boost the flow of lending to smaller firms, and added that the credit risk involved meant it was right that the finance ministry should take the lead in designing the plans.
Critics of quantitative easing argue that due to the bleak economic outlook, Britain is close to a liquidity trap, akin to that faced by Japan in the previous decade, in which firms do not want to invest and banks are unwilling to lend.
Dale accepted that there was a problem with business confidence, but denied that the BoE had become powerless.
"I don't think we're in a liquidity trap," he said. "What we showed last month is we were willing to act quickly and decisively in order to support demand in our economy and hopefully that will help to add to some extent to people's confidence about the future."
(Editing by Hugh Lawson/Toby Chopra)

ZURICH (Reuters) - A record-high Swiss franc and soaring raw material and energy costs pummeled cement maker Holcim's <HOLN.VX second-quarter net profit, sending its shares sharply downwards.
 
Holcim is struggling to offset higher coal, diesel and oil prices,parajumpers norge, which increase production and transportation costs,parajumpers norge, and is suffering from a sluggish construction recovery in North America,moncler jakke, and high inflation in emerging markets such as India.
The franc, which has hit one record after another against the euro and dollar in the past six months, has hurt profits at several Swiss companies,kjøpe parajumpers, among them pharma giant Roche (ROG.VX) and chemicals maker Clariant (CLN.VX).
The group said cost cuts and further price rises should put it on track to achieve like-for-like operating EBITDA (earnings before interest, tax, depreciation and amortization), which strips out the currency impact, at a similar level to last year.
Rivals Lafarge (LAFP.PA) and HeidelbergCement (HEIG.DE) also posted disappointing earnings after price rises failed to offset a surge in energy and raw material costs.
Holcim's net profit after minorities fell 13 percent in the second quarter, missing expectations in a Reuters poll and sending the company's shares down 5.3 percent at 4:26 a.m. EDT. The STOXX Europe 600 Construction & Materials index .SXOP fell 2.5 percent.
"Higher production and transportation costs could not be compensated for sufficiently through price increases," ZKB analyst Martin Huesler said. "More price increases are necessary."
Holcim, the world's second-largest cement maker, raised prices by 3.6 percent in the second quarter, and Chief Financial Officer Thomas Aebischer said further increases were planned.
"We're going to have to keep raising prices to balance out cost inflation," Aebischer told a conference call.
Operating EBITDA fell in all regions, despite a 2.6 percent increase in sales volume, as currency headwinds wiped out gains.
Some analysts pointed out that although Latin America and Asia drove up the company's top-line performance,parajumpers, they dragged down profitability as cost inflation and currency effects weighed on margins.
Holcim has hardly sold any C02 emissions certificates so far in 2011,parajumpers outlet, which also hurt results.
($1 = 0.793 Swiss Francs)
(Additional reporting by Silke Koltrowitz; Editing by David Cowell and David Hulmes)

NEW YORK (Reuters) - A string of courtroom victories by drugmakers in key product-liability trials could be a signal that these and other companies can beat back claims in upcoming cases against them.
AstraZeneca Plc (AZN.L), Merck & Co (MRK.N) and Pfizer Inc (PFE.N) are among the companies to win closely watched bellwether cases in recent years.
Bellwether cases are sample trials ordered by judges in situations where hundreds or thousands of plaintiffs have similar claims consolidated before a single state or federal court. Typically, a judge chooses a few individual lawsuits to proceed ahead of the rest. As their name suggests, the result of these battles can be predictive.
A win by the defendant might prompt settlements or spur plaintiffs to drop other cases,parajumpers norge.
Upcoming test trials include the first in federal court against Bayer AG (BAYGn.DE) for allegations that its Yaz/Yasmin birth-control pill caused heart attacks and other medical problems. An Illinois federal court set the trial for January.
Beyond the drug industry, a California federal court set a February 2013 trial date for a bellwether case against Toyota Motor Corp (7203.T) involving allegations of unintended acceleration.
Plaintiffs in such cases used to have more say in picking which lawsuits went to trial first. But over the past decade, influence has become more evenly split with defendants.
Today,Moncler salg, a judge commonly asks both sides to choose a handful of cases that would go to trial first and then adds several others to the pool. Cases are tried one after another, rotating from one party's choice to the next.
The shift has made it tougher for those suing big corporations, since plaintiffs already bear the burden of proof, their advocates say.
The defense also has an advantage,parajumpers norge, they argue, because the bellwether process can drag on for years and defendants have become adept at slowing down individual trials by filing procedural requests with the courts.
This favors defendants, who typically can afford to bankroll protracted litigation,moncler salg, said Paul Pennock of Weitz & Luxenberg, a plaintiff's attorney.
"There is a learning curve -- you learn a great deal on the job in each successive trial," Pennock said. "Defendants of multibillion-dollar corporations are far better financed than plaintiffs to endure it."
Judges often limit admissible evidence, said Pennock, who represented plaintiffs in lawsuits claiming AstraZeneca anti-psychotic drug Seroquel caused diabetes. By excluding key emails, he said, a New Jersey state judge "gutted" his 2010 liability case against the drugmaker.
Earlier this month, plaintiffs lost the fourth of five bellwether trials held so far against Merck & Co (MRK.N) in New York federal court over claims that the company's Fosamax osteoporosis treatment causes jaw damage.
A lawyer for the plaintiffs says he was hamstrung because U.S. District Judge John Keenan allowed only cases filed before January 2005 into the first phase of the bellwether trials. After that date, U.S. drug regulators had ordered that Merck include warning labels on the drug about jaw-bone problems.
"I've been trying these cases with one arm tied behind my back and another holding a bag of concrete," said Timothy O'Brien of law firm Papantonio Thomas Mitchell Echsner & Proctor.
O'Brien said he plans to appeal the most recent jury verdict, that there was insufficient evidence that Fosamax caused jaw-bone degradation in a 66-year-old Florida woman.
Merck still faces more than 1,600 related Fosamax lawsuits filed across the United States. The next bellwether trial is set for February, followed by another in May.
Merck, which did not respond to a request for comment, has a lot of experience with bellwether trials. Litigation over its Vioxx painkiller,parajumpers oslo, which tens of thousands of consumers said caused heart attacks, strokes or other problems, was a prime example of the bellwether system at work.
After prevailing in all but one of five federal bellwethers over Vioxx, Merck agreed in 2007 to settle most of the cases for $4.85 billion, far below earlier estimates for total company liability of as much as $50 billion.
The lead counsel for Merck in the Vioxx litigation, Philip Beck of law firm Bartlit Beck, acknowledged that defendants in test trials have fared better than plaintiffs in recent years.
"Judges are more likely to say, 'If we are going to have a series of bellwether cases, we want them to be representative instead of simply plaintiff-friendly,'" Beck said.
Pfizer has also won some big cases. These include two of three bellwethers in 2009 and 2010 against plaintiffs who claimed an increased risk of suicide from its off-label epilepsy treatment, Neurontin.
In 2010, the company settled the third and final test case in the litigation, which was consolidated before a federal court in Massachusetts.
The victories caused scores of plaintiffs to drop their cases, said Pfizer attorney Mark Cheffo, a partner at Skadden, Arps, Slate, Meagher & Flom.
Defendants do not win all bellwethers. In lawsuits over alleged rice crop contamination, bellwether losses led Bayer to a $750 million settlement with farmers in 2009. Bellwether trials in lawsuits over Chinese drywall have gone entirely in favor of the plaintiffs, who had widely been expected to win these cases.
There may be no fair method of selecting bellwethers when lawyers are involved in choosing them,parajumpers stavanger, experts say. But randomly selecting cases from a representative sample could eliminate bias, said Alexandra Lahav, a professor at the University of Connecticut School of Law and an expert in complex litigation.
Even when one side has won a string of trials, such as in the Fosamax bellwethers, those outcomes can't predict how other cases will unfold, she said. "No statistical result is defensible if the sampling isn't random."
(Reporting by Moira Herbst; Editing by Martha Graybow and Lisa Von Ahn)
(This story corrects the sixth paragraph of Oct. 31 story to show Toyota bellwether trial scheduled for February 2013, not next February)

Osborne said the independent Office for Budget Responsibility forecasts showed borrowing would fall to 79 billion pounds ($123 billion) in 2014/15,PJS jakke, against a March budget forecast of 46 billion pounds.
For next year,Moncler salg, public sector net borrowing is now forecast to total 120 billion years,moncler oslo, up from the March prediction of 101 billion.
The structural deficit would be erased by 2016/17,moncler jakke oslo, Osborne said.
Osborne said the Conservative-Liberal Democrat government was still broadly on track to meet its fiscal goals,parajumpers no, but had lost a one-year cushion previously programed into the fiscal strategy. ($1 = 0.6433 British pounds)
(Reporting by Matt Falloon,moncler salg, editing by Mike Peacock)

The fund,canada goose jakker, called Pershing Square Holdings,toms shoes for cheap sale, is likely to be listed on the London Stock Exchange or NYSE Euronext,billige Canada Goose Jakke, the paper said,Billige Canada Goose, citing people that it didn't identify.
Pershing Square Capital might create a fund that would be listed on an exchange to allow Ackman to raise fresh capital for his activist bets while still giving investors access to their money,Canada Goose Vest, people briefed on Ackman's plans said in June last year.
The New York-based company was not immediately available for comment,Canada Goose DK.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Ryan Woo)