The forecast was made in the company’s financial report for the fourth quarter and full year of 2023, published on Wednesday January 31.
In Europe, only one out of seven industry sectors, which are the main consumers of steel, has a “strong” outlook in terms of demand for the first quarter, SSAB said. This is the energy sector, due to the increased demand for the generation of renewable power.
The prospects for the construction sector in the Nordic region, however, remained gloomy.
The company defined the outlook of the other five industry sectors – heavy transport, automotive, construction machinery, materials handling, and service centers – as “neutral.”
SSAB added that there were some signs of a slowdown in demand from the automotive and heavy trucks sectors in Europe, despite positive indications from the sectors producing railcars and vessels in the US.
Indeed, some steel service centers in Northern Europe said that during January their flat steel sales to the automotive sector were around 10-15% less than planned.
In terms of service centers, SSAB said that there was some potential for restocking in the first three months of 2024.
SSAB expected that the two divisions of the company in Europe and the US would make 5-10% more shipments in the first quarter of the year compared with the last three months of 2023. Shipments of SSAB Special Steels were expected to be even higher, increasing by more than 10%.
The company noted that the expected improvements for SSAB Europe and SSAB Special Steels were related to seasonal factors, notably restocking. Indeed, restocking activity in January and reduced supply in the European market, due to output cuts, both supported price rises for flat steel products.
During January, the price of hot-rolled coil in Northern Europe moved up steadily. Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, averaged €731.73 ($792.22) per tonne for the month, the highest since May 2023.
Market sources told Fastmarkets, however, that the current price rise was entirely supply-driven, because many blast furnaces in Europe had not restarted operations. They were uncertain whether the upward trend would continue into the second quarter of 2024.
Green steel sales gain pace
SSAB hoped that demand for green steel globally would continue to grow steadily.
“There was increased interest in products with no carbon dioxide emissions during 2023, and we delivered more than 50,000 tonnes of SSAB Zero,” the company added. SSAB described this product as the “world’s lowest emissions steel product on the market.”
SSAB claimed that its SSAB Zero products were fossil-free for Scope 1 and 2 CO2 emissions.
According to Fastmarkets’ sources, the demand for green steel was very patchy in Europe and was mainly restricted to end-users. Only limited volumes have been traded in the market recently, with the automotive industry seen as a major consumers of such products.
Fastmarkets’ weekly assessment of the green steel, domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €150-250 per tonne on Thursday, unchanged since mid-December 2023.
SSAB’s key indicators in Q4 2023
According to SSAB’s financial report, the group’s crude steel production amounted to 1.71 million tonnes in October-December 2023, up from 1.64 million tonnes in the corresponding quarter of the previous year. Throughout 2023, SSAB’s crude steel production totaled 7.78 million tonnes, compared with 7.29 million tonnes in 2022.
Steel shipments, however, were a bit weaker in the last quarter of the year, reaching 1.49 million tonnes compared with 1.50 million tonnes in the corresponding quarter of 2022.
This was related to a seasonal market slowdown and planned maintenance at SSAB facilities, Fastmarkets understands.
Company revenue in the fourth quarter came to 26.47 billion Swedish kronor ($2.54 billion), down from 30.14 billion kronor in the corresponding quarter of 2022.
SSAB’s adjusted operating income for the fourth quarter of 2023 amounted to 2.40 billion kronor, compared with 3.77 billion kronor in the fourth quarter in 2022.
“The decrease compared with last year’s record high level,” it said, “was primarily due to a weaker market and lower steel prices, especially in Europe.”
Published by: Julia Bolotova, Darina Kahramanova
