Most European integrated steelmakers are likely to record negative Ebitda this year for the first time in ten years, according to Joerg Leib of the Steel Hub consultancy firm.
Speaking during a webinar this week attended by Kallanish, the analyst said Steel Hub created a model to calculate profitability of major integrated steelmakers in Europe. The model is based on the assumption that revenue will be down between -15% and -30% year-o-year in 2020, as a consequence of the coronavirus emergency and the fall in steel demand.
In the most positive scenario, with revenues moving down -15% y-o-y, all integrated steelmakers, except for Austria’s voestalpine, will record negative Ebitda. On the other hand, if a second wave of lockdowns occurs and revenues fall as much as -30% y-o-y, all firms’ Ebitda will drop significantly.
Leib also said spreads between raw material input costs and steel prices will remain stable compared to 2019, when they dropped significantly.
Based on current visibility, it is unlikely European integrated steelmakers will report a greater fall in Ebitda than -30% this year, Leib concluded.