South Korea's top automaker Hyundai Motor Co. stands to lose its No. 3 status in terms of market value to surging steelmaker POSCO due to stalling stock prices stemming from lackluster earnings, data showed Thursday.

Hyundai Motor's market capitalization stood at 32.2 trillion won ($28.3 billion) as of Wednesday, compared with 29.6 trillion won for the country's leading steelmaker, according to the data by the Korea Exchange.

The gap in the market cap of the two companies, which reached as high as 10 trillion won at the start of the year, has been narrowing sharply thanks to POSCO's stellar performance this year.

Hyundai Motor closed at 146,000 won ($128) on Wednesday, unchanged from the end of last year. Its dismal stock price forced the auto giant to surrender its position as the No. 2 cap to chip behemoth SK hynix Inc. in June.

In contrast, POSCO's share price has jumped 31.8 percent in the year to date, raising its market cap ranking to fourth from 10th as of end-2016.

The rise in POSCO's stock price is nearly twice the 16.9 percent increase in the benchmark Korea Composite Stock Price Index over the cited period.

Analysts said POSCO could overtake Hyundai Motor and emerge as the third-largest cap sooner or later in light of their earnings outlooks.

The global steel industry is seen as booming amid a slowdown in China's oversupply. POSCO has also been ramping up efforts to boost earnings through cost-cutting and business reorganization.

Local brokerage companies forecast POSCO's operating income to reach the 4 trillion-won range this year should its restructuring efforts bear fruit. It would be the largest operating income since the 5.7 trillion won recorded in 2011.

Hyundai Motor, however, has been faring ill in its large overseas markets, such as the United States and China.

The company saw its US sales decline this year from 2016 on slowing demand, with its domestic sales remaining in the doldrums due to sluggish shipments of SUVs.

Hyundai Motor's sales in China have been hit hard by the ongoing row over South Korea's deployment of an advanced US missile shield, called the Terminal High Altitude Area Defense system.

Hyundai Motor's second-quarter operating profit tumbled 23.7 percent on-year to 1.34 trillion won, with its bottom line plunging 48.2 percent to 913.6 billion won. It marks the first time in 2010 that its quarterly net profit has fallen below the 1 trillion-won mark.

"It is difficult to discover signs of growth momentum for Hyundai Motor for the time being amid falling demand in America," said Kim Jin-woo, an analyst at Korea Investment & Securities Co. "The company also plans to launch new car models in China from September as part of efforts to cope with the fallout from the THAAD showdown." (Yonhap)