Europe could see ‘pronounced’ Q3 demand downturn: SSAB

Demand in Europe weakened during the second quarter and there is a risk of a more pronounced downturn than normal in the third quarter, says Swedish steelmaker SSAB. While high-strength steel demand has been good, its customers are showing signs of a more cautious sentiment, Kallanish notes. Compared to Q2, SSAB Special Steels’ shipments in Q3 are assessed to be somewhat lower, due to a somewhat weaker market, as well as the planned maintenance outage at Oxelösund. Prices are assessed to be somewhat lower. SSAB Europe’s shipments are expected to be significantly lower, due to planned maintenance and a weaker market. Prices are expected to be lower in Q3 than in Q2. The costs of raw materials are expected to be somewhat lower than in the prior quarter, especially related to lower coal prices. SSAB’s consolidated shipments in Q2 inched up only 0.6% on-year to 1.72 million tonnes, despite crude steel output rising 5% to 2.09mt. Consolidated revenue dropped 11% on-year to SEK 31.8 billion ($3.06 billion) and net profit halved to SEK 3.9 billion. The result decreased compared to last year’s record level primarily because of a weaker market for SSAB Europe, Tibnor and Ruukki Construction. Performance at SSAB Special Steels and SSAB Americas was more stable. SSAB Europe shipments actually rose 8% in Q2 to 907,000t, while crude steel output was up 18% to 1.14mt. The prior-year quarter saw production limitations. While construction remained weak, shipments to the Automotive and Heavy Transport customer segments held up well. The outlook, however, is uncertain. SSAB Europe revenue dropped 10% to SEK 12.9 billion and adjusted operating result plummeted over 80% to SEK 764 million. First-half-year consolidated revenue dropped 5% on-year to SEK 63.7 billion and net profit fell 46% to SEK 7.6 billion. Shipments rose 2% to 3.46mt and crude steel output was up 11% to 4.14mt. Adam Smith, Poland