Belgian wire specialist Bekaert says it registered a recovery in demand, reaching a “…turning point” in most of its markets in the third quarter. Steel wire sales are expected to remain solid in Q4 despite the usual seasonality effects.
Demand from construction markets improved towards the end of Q3 but is projected to slow down by year-end, in line with seasonality, Kallanish learns from the company’s Q3 earnings report.
While the Covid-19 pandemic continues to create a high level of uncertainty, the company forecasts a step-up in performance in the second half of 2020 thanks to the recovery of demand.
The Steel Wire Solutions division registered continued good demand in Europe and pick-up in Latin America. In Q3 the business unit reported 2.8% organic growth, driven by higher volumes compared to the same quarter last year and a positive impact from passed-on wire rod price changes and other mix effects.
However, “…the turning point in the third quarter could not offset the significant contraction of the first half,” Bekaert says. The business unit reported a year-to-date sales decrease of -11.4% compared to the first nine months of 2019, driven by unfavourable currency movements and a -6.9% drop in volumes.
No major changes in demand conditions are expected for the Specialty Businesses division. The business unit reported a sales decrease of -7.3% in the first nine months, driven by the impact of the pandemic on demand. Combustion Technologies meanwhile picked up in Q3, while Sawing Wire activities remained limited. The company sees no major changes in business conditions in Q4, except for the usual seasonality.
Bekaert’s Q3 sales were up 24% from a weak second quarter. Consolidated sales for the first nine months were however -14% lower year-on-year at €2,755 million ($3.26 billion), due to the heavy impact of the Covid-19 pandemic.
