SEOUL (Reuters) – South Korean steelmaker POSCO on Wednesday said its first-quarter operating profit slid 19 percent from a year earlier amid higher costs for raw materials, matching analyst forecasts.

POSCO said it expected higher costs for materials and slowing demand for steel to crimp profitability this year, even as steel prices are expected to inch up.

The world’s fifth-biggest steelmaker said in a statement that it posted a consolidated operating profit of 1.2 trillion won ($1.05 billion) in the first quarter, compared with 1.49 trillion won a year earlier.

That matched an average estimate of 1.2 trillion won from 14 analysts, according to an I/B/E/S Refinitiv poll.

POSCO’s first-quarter revenue inched up 1 percent to 16 trillion won, while net profit fell 28 percent to 778 billion won.

Prices for key steelmaking ingredient iron ore climbed more than 20 percent in the first quarter of the year after miner Vale’s deadly dam collapse in Brazil in late January.

POSCO shares had risen 0.8 percent by 0201 GMT, while the broader market KOSPI was down 0.4 percent.

($1 = 1,143.7000 won)