South Korea's Posco, the world's fifth-largest steelmaker, said Tuesday its net profit for last year plunged 43.2 percent due to the global slowdown and intensifying competition with Chinese rivals.

Net profit for 2013 amounted to 1.35 trillion won ($1.25 billion) compared to 2.38 trillion won a year earlier, the country's top steel group said in a statement.

Operating profit was down 18 percent to 2.99 trillion won, while sales shrank 2.7 percent to 61.8 trillion won.

Slowing growth in China -- the world's top steel consumer -- and economic woes in Europe have sapped demand and caused a global glut, squeezing margins for the company.

Chinese steelmakers have also churned out a growing amount of cheap steel products, pushing market prices lower, while the weak yen blunted South Korean firms' price competitiveness in overseas markets, it said.

Posco earns about 40 percent of its sales from overseas.

"Structural supply glut in China intensified while cheap-priced products (from China) continued to flow in," the company said.

The price of carbon steel -- one of the company's key products -- has fallen to 776,000 won per tonne in 2013 from 883,000 won in 2012 and 986,000 won in 2011, it said.

The firm however predicted world demand for steel would pick up in 2014 to reach 1.5 billion tonnes, including 700 million tonnes in China.

Domestic steel demand will also perk up as South Korean firms win more shipbuilding orders and automakers expand exports, it said.

The company raised its sales and production target for 2014 to 65.3 trillion won and 37.7 million tonnes respectively.