Klöckner & Co is remaining low-key about the pace of price recovery in Europe. Its chief executive, Guido Kerkhoff, says he is hesitant to describe the development too positively, given the market is still shaky in its effort to stabilise.
“I do not yet see a positive trend on the horizon,” he told Kallanish during a conference call on Wednesday. Prices are picking up but very slowly, because customers remain reserved with making big investments. “The market is still delicate and needs to be preserved and nurtured with care, so to speak,” he said.
It would take a government investment incentive programme to ensure activity picks up. The German-based company is therefore pinning its hopes on the new German government. This is currently being formed in a coalition of the conservative CDU and social democrat SPD parties, as well as possibly one further partner party.
Obvious sectors for investment are residential construction, infrastructure and defence, Kerkhoff said. The latter field is cited increasingly as a cause for public spending. Klöckner recently installed an advanced laser facility in Kassel, mainly targeting agricultural machinery, mechanical engineering, and defence. Moreover, if the war in Ukraine came to an end soon, and the county regained peace, its reconstruction would be a task for foreign steel suppliers, Kerkhoff noted.
The company’s US business had to concede even steeper price falls than in Europe last year, by 40%, but managed to handle them reasonably well due to its shift to higher value-added services. “This would not have been possible six or seven years ago,” Kerkhoff concluded.
Christian Koehl Germany
