South Korean steel giant Posco declared that its mills have returned to full operation levels to meet the anticipated rise in global steel demand, suggesting a more upbeat outlook in the second half.

In a conference call with analysts on Tuesday, Posco said its third steel mill in Gwangyang resumed operations in July, with all factories at near full capacity since last month.

The Korean steel giant said it has been seeing a pickup in steel demand and expected sales to recover to pre-COVID-19 levels in the latter half of the year.

“The increased operation rate is likely to drive down fixed costs,” said Park Seong-bong, analyst at Hana Financial Investment.

The news briefly helped lift Posco shares. The stock, which plunged 17.8 percent so far this year, closed 1.8 percent higher at 194,500 won ($167) on Tuesday. Shares finished 0.26 percent higher Wednesday at 195,000 won.

Analysts see more room for growth in Posco’s share price, given its corporate value and rosy outlook.

Its price earnings ratio, when measured against this year’s profit estimates, stood at 16.4 on Tuesday, far lower than the industry average of 37.

Steel raw material prices have been normalizing. This month, Posco raised the price of hot-rolled and cold-rolled steel by 50,000 won and 20,000-40,000 won per ton, respectively, and is weighing another price increase in October.

Domestic hot-rolled steel prices recently hit 690,000 won per ton after iron ore prices surged to a six-year high, according to Korea Iron & Steel Association.

Chinese steel makers have been driving the latest price hike, fueled by increased demand from the world’s largest steel market. China’s Baoshan Iron & Steel upped the hot-rolled steel price for October by 50 yuan ($7.36), marking its fifth straight month of price gains.

This is likely to improve Posco’s balance sheet. Analysts predict the company’s consolidated operating profit to reach 615.1 billion won in the fourth quarter, according to local financial market data provider FnGuide. This would be a four-fold jump from its second-quarter earnings of 167.7 billion won.

Without setting a guidance, Posco in the conference call said its third-quarter earnings would likely be above the market consensus.

Hit hard by the pandemic, the company on a separate basis reported its first operating loss of 104.9 billion won in the quarter ended June.

Hana Financial Investment said it expects Posco’s steel sales in the final quarter to bounce back to 8.88 million tons from 7.76 million tons in the second quarter, driven by strong demand from the high-margin automobile steel.

In April, the company pledged to buy back 1 trillion won worth of treasury shares over the next year to shore up its share price.

By Seo Dong-cheol, Kim Gyu-sik and Kim Hyo-jin

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