Europe weakness hits SSAB earnings, foresees shipment growth

Swedish steelmaker SSAB posted lower earnings on-year in 2023 due mainly to the impact of a weaker market and lower prices, especially in Europe, Kallanish notes.

Consolidated revenue declined 7% year-on-year to SEK 119,489 million ($11.48 billion); adjusted operating result was SEK 16,467 million against SEK 29,283 million the year before. While 2022 was a record year for SSAB and most global steelmakers, 2023 was characterised by a weaker market, lower steel prices and higher raw material costs.

The weak market forced SSAB to adjust production, costs and staffing in Europe. These measures are expected to continue to be implemented during the first quarter of 2024, especially in the construction related segments. SSAB’s other European units, such as Tibnor and Ruukki Construction, also implemented cost saving programmes and personnel reductions.

Overall crude steel production at SSAB Europe surpassed 4.3 million tonnes in 2023, some 400,000t above the level registered in 2022. This is due to the fact 2022 output was impacted strongly by the consequences of the war in Ukraine.

For Q1 2024, SSAB expects shipments at the European unit to be somewhat higher than in Q4 2023; nevertheless, realised prices should be somewhat lower, therefore limiting the impact on turnover. SSAB Americas shipments are also expected to grow quaerter-on-quarter in Q1, while SSAB Special Steels shipments are expected to be significantly higher than in Q4 2023.

Despite the overall weakening of financial results in 2023, SSAB notes that demand for steel with no carbon dioxide emissions increased significantly. “We delivered more than 50,000t of SSAB Zero, a steel without scope 1 and 2 emissions. Interest increased strongly not only in Europe, but also in the USA,” the group says.

“We have started the construction of the electric arc furnace in Oxelösund, a key item for fossil-free steelmaking. At the end of January 2024, the ruling on the granted concession for the power lines to Oxelösund gained legal force and the project continues according to plan,” it continues.

Emanuele Norsa Italy