SSAB sees energy sector optimism, bemoans construction demand

SSAB predicts good demand for wind power and other renewables in the second quarter. These sectors are decidedly international and would benefit the Swedish company’s major units, SSAB Europe and SSAB Americas.

During the firm’s quarterly earnings call, chief executive Martin Lindqvist pointed to increasing activity for offshore wind in the USA, and also for bridge-building, which both require plate made by SSAB.

Looking at the past quarter, Lindqvist expressed some disappointment that expected restocking at service centres and users in the USA did not come about. He noted that the company’s US volumes go to end users and service centres in equal shares, and that service centres, especially, remained reserved.

In Europe, the company’s Finnish plants were affected by the national strikes, which saw the company lose out on 100,000 tonnes of production and inventory, Kallanish heard from Lindqvist during the call.

For its third main division, SSAB Special Steel, Lindqvist sports optimism, and stated that the company has kept improving the mix towards special steel “day-by-day, month-by-month”.

Prices for these products in the USA have weakened lately, arguably coming from high levels, while Europe will see a stabilisation. This is evident on the basis of the order backlog for the second quarter, with 90% of volumes already booked, “so the visibility is pretty good”, he noted.

Regarding customer segments other than energy, SSAB’s outlook is more modest. It expresses pessimism over construction, a typical local market, which it says is doing particularly weak in the Nordics. This also affects demand from makers of construction machinery, with weaker demand in Europe, China stabilising at a low level, and relative stability in North America.

Christian Koehl Germany