Swedish steelmaker SSAB sees Q2 demand normalizing after strong Q1

Specialist steel producer SSAB sees demand normalizing in the second quarter, saying it would continue to be a “decent” quarter, after a strong start to the year, Martin Lindqvist President & CEO of the company said during an analyst call April 26.

The Swedish group said the outlook for demand and shipments in Q2 was still characterized by some uncertainty, including further issues with component supplies in the vehicle industry as well as bottlenecks continuing to affect logistics chains. Global demand for high-strength steel is believed to remain at a good level in most markets.

“SSAB’s first quarter was characterized by high steel prices and earnings rose to a record level. All divisions posted strong results more than offsetting the impact of an unplanned stop in a blast furnace in Raahe, Finland, certain production disruptions in SSAB Americas, as well as higher raw material costs,” Lindqvist said.

The blast furnace was temporary halted due to a problem at the so-called chilled heart and had to be stopped for around five weeks.

“The tragic situation with the war in Ukraine is affecting the steel markets and SSAB. We have minor operations in Ukraine through Ruukki Construction and our highest priority is to help our employees and their families,” he said.

SSAB directly ceased sales to Russia and Belarus and discontinued new purchases of ore and coal from Russia, with the company introducing several measures to ensure access to raw materials, “but there is a risk of disruptions related to sanctions and other fallout from the war in Ukraine.”

SSAB’s overall crude steel production during the first quarter of 2022 was down 17% compared with the first quarter of 2021 to 1.75 million mt and up 15% compared with the fourth quarter of 2021. Shipments during the first quarter of 2022 were 1.66 million mt, down 9% on Q1 2021, but up 4% on Q4.

The company, which reported good margins, said EBITDA in Q1 was a record SEK 9.2 billion, compared with SEK 2.9 billion in the same quarter last year and SEK 7.8 billion in Q4 2021.

— Annalisa Villa