Spanish stainless steel group Acerinox’s melting shop production fell 37% year on year to 397,000 mt in the fourth quarter of 2022 amid low apparent demand and inventory adjustments, it said late Feb. 28.
For the full year production was down 16% at 2.2 million mt.
Q4 volume from its cold-rolling operations was 247,000 mt, down 42% year on year, with the full year volume down 11% at 1.4 million mt.
Longs production was down 24% year on year at 48,000 mt in Q4, with full year volume down 5% at 232,000 mt.
The company operates plants in Spain, the US, South Africa and Malaysia with a combined melt shop capacity of 4.5 million mt/year, as well as production facilities for high performance alloys in Germany.
It did not provide production figures for individual plants.
Platts, part of S&P Global Commodity Insights, assessed hot-rolled coil prices in Northwest Europe up Eur10/mt on the day to Eur805/mt ex-works Ruhr Feb. 28.
From the third quarter onwards, production had been adapted to the needs of the market, Acerinox said. It also carried out maintenance at the melting shop and hot rolling lines in Spain, the melting shop in South Africa and its hot rolling in the US.
In Europe, actual demand declined due to the uncertainties arising from the invasion of Ukraine, which resulted in inventories closing above the average of recent years.
The company said it booked a Eur98 million ($104 million) inventory adjustment at year-end to bring its European inventories in line with the price situation of that market.
Cost inflation, especially energy costs, dented competitiveness in Europe, especially in Spain, it said, while imports into the region remained at high levels at the end of the year, largely due to the price spread with Asia.
The company also booked a Eur204 million impairment at re-roller Bahru Stainless in Malaysia due to weak demand in the Asian market amid oversupply and aggressive pricing strategies by other producers, it said.
The company said it currently expected the dynamics of H2 2022 to continue, with the apparent consumption improving, although still slow.
The North American market was the best performer, it said.
The company’s US unit, Kentucky-based North American Stainless plans to increase production capacity by 20% to 200,000 mt/year with an investment of $244 million to install new cold rolling trains and upgrade its annealing and pickling lines.
— Gianluca Baratti