SBQ steelmaker Schmolz+Bickenbach was severely affected by the Covid-19 pandemic in the second quarter, as lower steel demand translated into reduced sales volumes and revenue.
“The biggest impact came from the extensive shutdowns of major European automobile manufacturers and their suppliers,” says chief executive Clemens Iller.
S+B reported a -38.1% on-year decrease in Q2 sales to 301,000 tonnes, Kallanish notes. This was most pronounced for quality and engineering steel, whose shipments fell -42.3% on the back of the sharp decline in demand from the automotive industry.
Volumes also fell in the stainless steel and tool steel segments, but with less sharp declines of -28.3% and -22.2% respectively. The average sales price/tonne of steel was €1,561 ($1,839) versus €1,662 in Q2 2019. This fall is mainly attributable to lower base prices as well as lower scrap and alloy surcharges than in the previous year.
S+B’s revenue declined -41.8% on-year to €469.9 million. The decline was most pronounced in the quality and engineering segment, at -50.1%. Revenue from stainless steel was down by -33.6 %, and for tool steel by -34.2%. Geographically, all regions and countries suffered a double-digit decline in revenue. Adjusted Ebitda was negative €45.8m, against positive €40.5m a year earlier.
The company previously told Kallanish new, stricter EU steel import rules are restrictive for every country outside the EU, including Switzerland. “Their effect was greatly mitigated by Covid-19, as demand collapsed,” it said. “Therefore, with this low demand, we currently have no problem with more stringent import conditions, but as soon as this changes, Swiss Steel will have to look again at the permissible quarterly quantities.”
Despite the slight increase in customer activity from May, demand is returning extremely slowly. A cautious, very limited recovery will not emerge until Q4, S+B concludes.