Spanish stainless steel group Acerinox reported Feb. 27 record melt shop output of 2.6 million mt in 2021, a 19% increase year on year, driving the company to record high annual earnings.
Net profit increased 11-fold to Eur572 million ($641 million) in the full year – the greatest in its 52-year history – with units running at full capacity in the fourth quarter, chief financial officer Miguel Ferrandis said.
The company said it sees an improving outlook for Q1 2022, a seventh successive quarter of improvement thanks to high demand levels, low inventory levels increasing prices, and an increasing fracturing of markets into their respective regions.
The momentum should carry through for the first half of the year, CEO Bernardo Velazquez said, noting that contracts for the period have largely been agreed and the order book is also at a record level.
Velazquez noted that the company has almost no exposure to the Russian or Ukrainian markets, while it sees that an energy price spike that affected its Spanish operations likely peaked in Q4.
Overall, the company expects to increase its capital expenditure by 45% to Eur145 million in 2022 mostly on equipment updates and maintenance, but also to make projects more sustainable and reduce energy consumption, Velazquez said.
The company used recycled material for 90% of its raw materials in 2021, it noted.
Acerinox operates plants in Spain, Kentucky, US, South Africa and Malaysia with a combined melt shop capacity of 4.5 million mt/yr, as well as production facilities for high performance alloys in Germany.
Fourth quarter production was 627,000 mt, up 2% year on year but down 2% from the third quarter, partly due to the impact of the holiday season.
Cold-rolled production was 423,000 mt, up 14% year on year with the full year volume up 17% from 2020 to 1.6 million mt.
Long production in Q4 was 62,000 mt, up 17% year on year and 245,000 mt for the full year, also up 17% year on year.
Volumes were lifted by a restart of operations at its Bahru Stainless operation in Malaysia in the third quarter, following a two-and-a-half month halt due to COVID-19 restrictions. The US Columbus stainless operation optimized production capacity thanks to diversifying its production portfolio, following recent upgrades, Acerinox said.
In its Germany-based alloy business VDM, which it bought in 2020, the company saw Q4 production of 19,000 mt in the melting shop, up 53% year on year, while full year volume was 78,000 mt, up 22% year on year.
In VDM’s finishing shop, production was 11,000 mt in Q4, up 34% over the period, with full year output of 40,000 mt, up 7% year on year.
— Gianluca Baratti
