Europe’s automotive segment fails to strengthen: thyssenkrupp

The steel divisions of Germany’s thyssenkrupp AG (tk) may reduce output slightly in the face of potentially weaker orders but the company does not expect to idle capacity.

In reporting fiscal first quarter earnings, cfo Klaus Keysberg notes that the company does not expect increasing dynamics from the automotive industry in the months ahead, at least not in Europe. A “gap compared to pre-crisis levels” will prevail, Kallanish hears him say in the earnings conference call.

For the current prospects of capacity utilisation of tk’s mills, Keysberg notes that the mills’ steel output can be reduced only within limits, but that the company will not stop any blast furnace.

In the quarter ended 31 December, thyssenkrupp conceded sinking revenues and orders and diverging impact from automotive customers.

At the group’s steelmaking unit, tk Steel Europe, the figure of €2.4 billion ($2.6 billion) for both order intake and revenues was below the prior-year quarter’s of €3 billion, also for both indicators. This was due especially to strong price declines. Whereas shipment volumes were stable compared with the prior year, at some 1.9 million tonnes, order volumes decreased slightly to 2.1mt mainly driven by lower demand from automotive customers.

Against that, at the group’s distribution division, tk Materials Services, the business with automotive customers through its service centres provided some stability. The division overall still reported declining results, at €2.9 billion for both order intake and sales, down 17% and 21% year-on-year, respectively. The division saw lower prices especially for finished steel and stainless steel, and lower demand in Europe.

However, significantly positive earnings contributions were delivered by the service centres, Aerospace and the direct-to-customer business.

Keysberg notes that the positive service centre operations were mainly achieved in the North American units. Shipment of materials and raw materials at tk Materials Services versus the prior-year-quarter went down from 2.1mt to 1.8mt.

Christian Koehl Germany