Day: 4 August 2022

German distribution group Klöckner & Co posted its strongest earnings since its 2006 listing in the first half of 2022, thanks to a huge temporary rise in steel and metal prices. It expects even higher sales until the end of the year.

Ebitda before material special effects increased to €423 million ($431m) from €401m in H1 2021, Kallanish notes. Net income increased to €323m against €301m a year earlier.

Sales rose 48.8% on-year to €5 billion.

However, in the second quarter alone, Ebitda before material special effects decreased to €222m against €271m in Q2 2021. Net income also fell to €151m against €215m a year earlier.

The company ramped up sales in Q2 to €2.58 billion, from €1.85 billion in Q2 2021.

“Thanks to higher prices in the market, we have continued implementing our group strategy, laying the foundation for an even more successful Klöckner & Co in the future,” says the company’s chief executive, Guido Kerkhoff. “We have strengthened our partnership with Nucor in the US, added to our stainless steel product and service portfolio by relevant acquisitions through our subsidiary Becker Stahl-Service, and expanded our advisory capabilities for green products and services.”

“As this shows, even in economically challenging times, we continue to work systematically on our strategic priorities,” he adds.

Due to anticipated higher average steel prices, Klöckner expects significant sales growth in full-year 2022. After a significant intervening rise in the first half-year, prices have recently corrected. In light of this and of the challenging macroeconomic environment, the company forecasts Ebitda of €50-100m before material special effects in Q3.

A figure of more than €500m is expected for the full year, which would be the second-best result since the IPO in 2006, the firm claims.

After generating cash flow from operating activities of €262m in Q2 as a result of consistent net working capital management, Klöckner also expects a significantly positive figure for H2 and the full year.

Svetoslav Abrossimov Bulgaria

European scrap values seem to be on the verge of increasing this month in an unexpected turn of events that is seeing mills search for material despite the August holidays. This is mostly due to the low availability of new scrap grades, such as new arisings E8 and the high shredded automotive quality, market participants tell Kallanish.

Scrap merchants in Eastern European countries, Germany and Italy say they will not sell material unless they are paid some increases. They are supported by reduced collection of E8 from the automotive industry and the recent stoppages at re-rollers in southern and Eastern Europe to balance supply with demand. European sources expect the scrap market to become lively again in September.

Sales of some finished long products and coil derivatives proved to be better than expected in July but uncertainty is still looming.

Italian scrap merchants are asking for €20-30/t ($20.5-30.7/t) increases. This should bring the E8 mixed grade to the level of €380/t delivered in Italy. Germany and some Eastern European countries such as Poland are adopting a wait-and-see attitude but talking about similar hikes. In Austria, mills are looking for the high E8 grades but availability is said to be low.

By the end of this week, August prices are expected to become more definite in Europe.

Natalia Capra France

Italian re-roller Marcegaglia is launching a new price list effective this month, Kallanish learns from the company.

The new list for welded tubes will take into consideration current hot rolled coil values, but also energy costs. The discount applied will also consider the new cost structure related to energy rates, significantly increasing labour costs due to inflationary pressures, and prices for the materials used to produce tubular products.

The new price list will be published in the coming days and will become effective immediately. Updated discounts will be communicated at publication.

Last month, re-rollers in Italy noticed some demand improvement for welded tubes and other coil derivatives as distributors replenished their stocks before the August summer break.

Natalia Capra France

European scrap values seem to be on the verge of increasing this month in an unexpected turn of events that is seeing mills search for material despite the August holidays. This is mostly due to the low availability of new scrap grades, such as new arisings E8 and the high shredded automotive quality, market participants tell Kallanish.

Scrap merchants in Eastern European countries, Germany and Italy say they will not sell material unless they are paid some increases. They are supported by reduced collection of E8 from the automotive industry and the recent stoppages at re-rollers in southern and Eastern Europe to balance supply with demand. European sources expect the scrap market to become lively again in September.

Sales of some finished long products and coil derivatives proved to be better than expected in July but uncertainty is still looming.

Italian scrap merchants are asking for €20-30/t ($20.5-30.7/t) increases. This should bring the E8 mixed grade to the level of €380/t delivered in Italy. Germany and some Eastern European countries such as Poland are adopting a wait-and-see attitude but talking about similar hikes. In Austria, mills are looking for the high E8 grades but availability is said to be low.

By the end of this week, August prices are expected to become more definite in Europe.

Natalia Capra France