German steel distributor Klockner’s 2022 shipments fall 4.1% on year

German steel and metals distributor Klockner & Co.’s shipments were 4.1% lower in 2022 at 4.68 million mt, it said in its 2022 financial results released March 9.

Sales for the year, however, rose 26% to Eur9.4 billion ($9.9 billion), driven by higher average price levels.

The company expanded its range of sustainable products and services in 2022 and brought together its CO2-reduced products and services under its Nexigen brand, which enables customers to reliably procure CO2-reduced steel and metal products, it said.

Klockner delivered the first quantities of CO2-reduced steel to long-term customers, such as Mercedes-Benz and Siemens, in 2022 and also launched a partnership with stainless steel producer Outokumpu, allowing it to supply CO2-reduced stainless steel.

Financially, Klockner reported an EBITDA before material special effects of Eur417 million, down 50.8% year on year, which it said was a strong result given the challenging economic environment.

“We made significant progress toward our goal of becoming the leading one-stop shop for steel, other materials, equipment and processing services in Europe and the Americas,” Klockner CEO Guido Kerkhoff said.

In late 2022, its US subsidiary Klockner Metals Corporation acquired National Material of Mexico, strengthening its steel and metals distribution position and its steel service business in North America.

The acquisition is still subject to the necessary antitrust approvals, with Klockner expected to close it before summer 2023.

Klockner also strengthened its partnership with US steelmaker Nucor and is investing in a heavy plate processing plant at Nucor’s new steel mill site in Brandenburg, Kentucky to develop sustainable, innovative and complex solutions for the entire supply chain and extending its portfolio of higher value-added services, it said.

To expand its products and services in Europe, Klockner also acquired Hernandez Stainless and RSC Rostfrei Coil Center, allowing it to enter into stainless steel processing.

Steel market to normalize in 2023

Looking forward, Klockner said it expected the global steel market to increasingly normalize in 2023 despite the economic environment remaining challenging.

“A stronger demand trend in the Company’s key European and US markets is thus expected to bring a considerable increase in shipments compared to fiscal year 2022,” it said.

However, it said that, despite higher steel prices at the beginning of 2023, it expected a lower price level overall year on year and correspondingly lower sales.

Q1 2023 EBITDA before material special effects is expected to be higher at Eur40 million-90 million, due to an improving macroeconomic environment, a positive price trend and rigorous net working capital management.

Platts, part of S&P Global Commodity Insights, assessed domestic HRC prices in Northern Europe at Eur680/mt ex-works Ruhr at the end of December, down 26% over the course of 2022. The price has risen since to be assessed at Eur835/mt on March 8.

— Jacqueline Holman