Spanish stainless steel producer Acerinox recovered most of its lost production in the third quarter, with melt-shop volume rising 25% quarter on quarter to 524,000 mt on recovering demand, the company reported Oct. 26
The figure was a 3% decline from the year ago quarter but sufficient to push the company back to profit after Q2 production disruptions and collapsing demand.
Hot-rolled production was 459,000 mt, up 30% from the previous quarter and also down 3% year on year.
Cold-rolled output rose 14% from Q2 but was down 16% year on year, while long product output rose 4% quarter on quarter and 2% year on year to 51,000 mt.
In its newly acquired high performance business in Germany, the company produced 40,000 mt in the melting shop and 24,000 mt in the finish shop from when it acquired the business on March 17 through to end September, with no previous comparison.
The new business helped Acerinox swing back to profit as it also implemented cost-cutting measures in the quarter.
Personnel costs were reduced 10% year on year for the year to date to Eur282 million ($333 million) while operating costs were cut 20% over the period to Eur387 million, the company said, without elaborating.
The company made a net profit of Eur28 million in the quarter, compared with a loss of Eur26 million in Q2 which was affected by the peak of measures to restrict the spread of COVID-19.
Production was interrupted by five days of stoppages at the end of Q1 and start of Q2 in Spain, 35 days in South Africa and 28 days in Malaysia.
Looking forward, the company said the reactivation of a number of sectors, its order backlog and geographical diversification, led it to expect fourth-quarter EBITDA to be in line with that of the third quarter, when it made Eur87 million – roughly in line with the previous two quarters.
While demand looked robust in the US market, where Acerinox makes 48% of its sales, the seasonal fourth quarter slowdown needed to be considered, the company said.
— Gianluca Baratti