The European stainless steel market remains “deeply depressed” despite some improvement in the fourth quarter of 2023, says stainless steelmaker Aperam in its 2023 financial report monitored by Kallanish.
“Extreme margin pressure has persisted and volumes reflect an industrial recession in Europe,” comments chief executive Timoteo Di Maulo.
Owing to lower sales volumes and weaker prices, the company’s turnover last year decreased by 19.2% on-year to €6.5 billion ($7 billion). Shipments also declined by 4.8% to 2,198,000 tonnes. Adjusted Ebitda reached €304 million compared to €1.1 billion the previous year.
The stainless and electrical steel division recorded sales of €4.2 billion in 2023 with shipments at 1,550,000t. This reflects a decrease from €5.5 billion turnover and shipments of 1,600,000t in 2022.
The Recycling & Renewables division, the best-performing segment, recorded an Ebitda of €156m last year compared to €86m in 2022 thanks to higher volumes and positive inventory valuation effects. Sales stood at €1.9 billion, against €2.4 billion in 2022. In 2021, the steelmaker acquired German stainless recycling company ELG Haniel for a total value of €357m, including €30m equity (see Kallanish passim).
“This crisis reveals how important the successful integration into raw materials has been for Aperam. In Q4, the Recycling & Renewables division was Aperam’s largest earnings contributor for the first time. Entering 2024, Phase 5 of the ‘Leadership Journey’ – our self-help program – started,” Di Maulo concludes.
The stainless steel market in Europe is going through a phase of destocking and strong stagnation. Steelmakers are grappling with high cost of production and weak sales of coils and derivatives. In the coil derivative sector, aggressive commercial behaviours in certain EU countries are contributing to dragging down prices. The entire supply chain confirms a painful margin squeeze is occurring, Kallanish notes.
Natalia Capra France
