Distribution group Klöckner & Co cashed in massively in the third quarter on considerably higher steel prices, as well as on windfall effects brought by the price surge. While most steel prices have meanwhile seen a downward correction from their record peaks in summer, this trend seems to be turning again at the moment.
“Right now, I think we are seeing a gentle resurgence of prices,” chief executive Guido Kerkhoff told Kallanish during a telephone conference, pointing at “many positive signals” in that direction. He cited a lack of Chinese-origin imports into the EU as well as to the USA, Klöckner’s main playgrounds, which are now feeding on their domestic production. Also, he sees transatlantic EU exports on the rise.
At most customer groups in both regions, demand is stable or inching up, with mechanical engineering especially providing full order books, Kerkhoff said. Demand from the automotive industry is still seen flat for the time being, “but the bottleneck of semiconductor chips will be opening at some point next year”, he said. Klöckner is the largest mill-independent steel distributor in the joint markets of the EU and the USA, so its assessment of the climate has some weight.
On the causes for the continued price surge seen this year, Kerkhoff explained that they include ancillary costs that go beyond the pure materials price. These include higher prices for truck transport, for containers on sea, and even for the wood used for the pallets in the warehouses. Another factor are wage costs linked to steel prices, like provisions for sales staff.
Christian Koehl Germany
