Klöckner foresees increased demand in Europe and US

Steel distribution group Klöckner & Co mostly expects to see slight growth in real steel demand and shipments for 2019 for its key markets of Europe and the US, Kallanish hears from the company.

The German-based group anticipates revenues to even rise sharply on the back of investments in expansion and an expected higher overall steel price level than in the preceding year. Klöckner forecasts a slight increase in its operating income, even though a repeat of the previous year’s positive price effects in the US is not expected.

In its fiscal year 2018, Klöckner’s revenues rose 7.9% to €6.8 billion ($7.7 billion) largely because of higher prices. Operating income (Ebitda) improved by 3.4% to €227 million. Apart from the positive trend in prices over much of the year, it attributes the increase primarily to [… internal] optimisation measures. Net income was €69m, compared with a prior-year figure of €102m, which was boosted by one-off tax effects.

Klöckner highlights the independent industry platform XOM Materials, launched in Europe in February 2018, as a major step in its progress. Around 50 employees now work for the company at five locations. The platform is set to launch in the US within the first half of 2019. A first financing round with external investors is expected to be completed by the end of this year.

“In XOM Materials, we have realised our vision for the future of steel distribution,” ceo Gisbert Rühl says. “The platform – which is open to everyone in the market – will gradually unravel the traditional steel industry value chain and replace it with a digital network.”