Salzgitter sees mixed tubes business performance, Trading suffers

In the first nine months of a difficult year so far, Salzgitter’s Steel Processing unit, which covers tube and plate activities, actually lifted revenue by €127 million on-year to €1.684 billion ($1.8 billion). However, order intake suffered a drop of €446m to €1.74 billion, Kallanish hears from the German steelmaker.

Salzgitter’s portfolio covers one of the widest ranges of tubes in Europe. Reviewing the year so far, it notes that the realignment of the European energy market aims at securing the supply of natural gas and hydrogen and carbon disposal. This constellation gives rise to huge medium- and long-term market requirements for the large-diameter pipe of Europipe, its joint venture with Dillinger, Salzgitter says.

Inquiry activity for medium-diameter line pipe proved stable at the start of the year, but deteriorated markedly over the course of the second quarter. Demand for the tubes of Mannesmann Grossrohr GmbH (MGR), which was already weakening in the first half of the year, thus dwindled further as the year progressed. The precision tubes market, too, was characterised by weak economic momentum.

Of Salzgitter’s other divisions, the most noticeable drop occurred in Trading, with sales down by €1.1 billion to €2.56 billion, and order intake by €501m to €2.36 billion. The losses occurred due to lower margins in stockholding distribution, whereas they remained stable in international trading, the company notes.

Shipments in this division dropped from 2.86 million tonnes to 2.36 million tonnes. Amid average inventory prices declining with a time lag, stockholding distribution delivered a negative result. Against that, stable margins were achieved in international trading and at the Universal Eisen und Stahl Group (domestic plate distribution), but could not compensate for the losses in stockholding distribution.

Christian Koehl Germany