Germany’s Klöckner & Co suffered from falling prices and volumes in 2019, and ended the year with a net loss. It has entered the new year with optimism that this can be turned around, mainly because last year’s phase of windfall losses in a period of falling steel prices has now been largely overcome.
However, by the time that the distribution group announced its figures in Düsseldorf yesterday, the coronavirus has become a major wildcat factor that will not make things easier, warned ceo Gisbert Rühl.
Shipments fell by -7.5% to 5.65 million tonnes in 2019. This, combined with falling steel prices in the group’s main markets, of Germany/Europe and the US, saw revenue fall by -7.0% to €6.3 billion ($7.1 billion). The year ended therefore with a net loss of €55 million. “The effects of the steel price deterioration were considerable,” Rühl said at the press conference attended by Kallanish.
Before the coronavirus became so widespread Klöckner continued to expect an increase in shipments year-on-year for 2020, mainly because of healthy activity in its main customer sector, construction, in both Germany and the USA. Against that, prospects for the automotive and mechanical engineering sectors are bleaker, Rühl noted.
So far, the group has not yet felt any immediate disruption caused by the coronavirus, given that construction is not dependent on international supply chains which may break, Rühl explained. This, however, could well happen in the automotive and the mechanical engineering industries, which are already suffering from a slowing economy.
