German distributors still postponing restocking: Klöckner’s Kerkhoff
Distributors in Germany remain reserved when buying larger volumes of steel for their inventories, according to Klöckner & Co chief executive Guido Kerkhoff.
The point of replenishing the shelves has not yet been reached, Kerkhoff said during a conference call on Wednesday when asked by Kallanish for the status quo of distributor and service centre buying behaviour. Regular business with a continuous turnover of products is not yet in sight. “I think the status quo is that people buy only as much as they are expecting to sell,” he replied.
He alluded that prices are starting to see some gentle recovery, but real demand is yet to improve. Nevertheless, he is not completely pessimistic. “Warehouses are still relatively empty, but, yes, I do believe that the point of return to business will come,” he noted.
His estimation is reflected in the outlook the company gives for the fourth quarter, and ultimately for the whole of 2024. In Europe, it sees a drop in real steel demand by 1-3%, with the transport/automotive segment pointing more steeply downwards than construction, mechanical engineering, or household appliances. The one sector with relatively stable demand is energy. “It does not look like activity will increase, but we are at an already low level,” Kerkhoff said.
The group is overall more upbeat about performance and prospects in its other big market, the USA, but here, too, sees a slight dip of between 0% and 1% in demand from its customer industries. However, “this is quite normal in an election year with the insecurities this brings,” he concluded.
Christian Koehl Germany
Klockner & Co Q3 shipments rise, sales fall on low steel prices FY24 look positive
In Q3 Klockner & Co increased shipments to 1.1 million tons, up 2.8% on the prior-year quarter and up by 3.4% to 3.4 million mt in the first nine months of 2024, the Company announced on Nov 6 in its earnings.
The year-on-year shipments increase is mainly due to the acquisitions in Mexico and the US, but due to the lower steel prices, the company’s sales fell to Eur1.6 billion in Q3 down from the Eur1.8 billion recorded in the same period of 2023 and down by 3.8% to Eur5.1 billion in the first nine months of the year.
Despite the continued weak demand in Europe and the steel price correction during large parts of the reporting period, Klockner & Co expects an overall positive fiscal year 2024.
Klöckner & Co continues to forecast EBITDA between Eur120 million and Eur180 million and expects a strong and significantly positive cash flow from operating activities, although this is likely to be below the prior-year level. From January to September the company’s EBITDA reached Eur179 million, down by Eur86million resect the same period of the year before.
“In a challenging market environment, we have made major progress in implementing our Group strategy,” Guido Kerkhoff, CEO of Klöckner & Co SE said. “Through targeted investment in selected sites in the US and Germany, we have been able to expand the higher value-added processing and metalworking business.. In addition, winning the German Sustainability Award once again is a great confirmation of our success in decarbonizing the steel industry.”
Klockner & Co expanded its higher value-added business, in the US, targeted investments have enabled the Charlotte and Dallas sites to evolve from a pure distribution operation to a higher value-added fabrication and metalworking operation. Further progress was also made in Germany, for example with the investment in a fully automated sawing and drilling system in Landsberg, aiming to increase Klöckner & Co’s profitability and reduce its dependence on volatile commodity markets.
On digitalization and automation the quantity of digital quotes increased by more than 27% in the first nine months of 2024 compared to the same period of the previous years the company continues in its progress towards its vision of “zero-touch” and minimum manual intervention.
Platts, part of S&P Global Commodity Insights, assessed hot-rolled coils, down in Q3 from Eur635/mt registered on July 1 to Eur545/mt recorded on Sept 30.
Since the beginning of the year, HRC prices dropped by Eur135/mt from Eur690/mt registered on Jan 02 to Eur555/mt ex-works Ruhr November 5, down Eur5 on the day.
Klockner & Co SE is one of the largest producer-independent distributors of steel and metal products and one of the world’s leading steel service center companies. With its distribution and service network of around 120 sites, primarily in North America and the “DACH” region (Germany, Austria and Switzerland), Klockner & Co supplies more than 60,000 customers.
Klöckner sees increasing low-emission steel products acceptance
Steels that are certified as low-carbon-emission products have so far been demanded mainly in Europe and by big users, but are gaining ground in other segments and regions, Klöckner & Co observes.
When asked about buyers’ acceptance of CO2-reduced product premiums, chief executive Guido Kerkhoff said during a recent conference that it was “good in principle”, but varied by segment and region. Comparing the distribution group’s two main markets, he explained the level of acceptance in Europe is better than in the USA, “but they [US buyers] are catching up”.
Also, “green” steel is primarily a domain of the big user groups like the automotive industry, while small and medium-sized customers are content with receiving “some kind of certificate”, he added. However, “inquiries are increasing and interest is becoming more profound,” Kallanish heard him say during the conference.
“The wind is changing in the USA as well, so in the premium segment you will not be able any more to offer only grey and black standard products,” he observed.
He did not elaborate on the short-term future, when more costly CO2-reduced material in Europe could face a hard time amid continued sluggish demand. In a different context, he stated that “on the domestic market, we need to prepare for rough competition for low volumes”.
Last year, Klöckner introduced its own low-CO2 steel brand under the name of Nexigen. In spring, it launched the Nexigen PCF Algorithm, which can be used to determine the Product Carbon Footprint (PCF) for almost all its products. More recently, it presented a tracking solution that allows customers to view their emissions history for products purchased from the company.
Christian Koehl Germany
Klöckner & Co: Erwerb von National Material of Mexico abgeschlossen
Nach der Genehmigung der zuständigen Kartellbehörden hat Klöckner & Co den Erwerb von National Material of Mexico („NMM“) vollzogen. NMM ist ein führendes unabhängiges Service-Center-Unternehmen sowie Anbieter von Werkstoffen für die Automobilindustrie und andere industrielle Endmärkte in Nordamerika und mit zehn Standorten in Mexiko vertreten. Durchgeführt wurde die im Dezember 2022 vereinbarte Transaktion über die US-Tochtergesellschaft Kloeckner Metals Corporation („KMC“).
Durch den Erwerb von NMM kann KMC seine Präsenz in Mexiko deutlich ausbauen und seine Position dort stärken, wo die bedeutendsten Automobil- und Industriekunden ansässig sind. Da sich die beiden Unternehmen bei der regionalen Abdeckung, den Kundensegmenten und mit Blick auf die starke Position von NMM im Automobilsektor hervorragend ergänzen, bringt der Zusammenschluss Vorteile für beide Unternehmen.
Zukauf gilt als „ideale Ergänzung“
Guido Kerkhoff, Vorstandsvorsitzender der Klöckner & Co SE: „Der Abschluss dieser Transaktion stellt einen wichtigen Meilenstein auf dem Weg zur Umsetzung unserer Unternehmensstrategie ‚Klöckner & Co 2025: Leveraging Strengths‘ dar. Dadurch werden wir unsere führende Position in der Stahl- und Metalldistribution sowie im Stahl- Service-Geschäft in Nordamerika langfristig weiter stärken. Ab sofort profitieren unsere Kunden von einem noch größeren Produkt- und Service-Portfolio.“
John Ganem, CEO von Kloeckner Metals Corporation: „In National Material of Mexico haben wir die ideale Ergänzung gefunden, um die Kloeckner Metals Corporation erfolgreich in die Zukunft zu führen. Wir freuen uns auf die Zusammenarbeit mit dem starken Team von National Material of Mexico und sind uns sicher, dass wir unsere Erfolgsgeschichte auf dem nordamerikanischen Markt gemeinsam fortschreiben werden.“
Das kombinierte Unternehmen deckt mit 56 Standorten und rund 2.600 Beschäftigten alle relevanten Regionen der USA und Mexikos auf breiter Basis ab. Künftig will das Unternehmen seine Marktposition weiter ausbauen, sein Produktangebot erweitern und die bestehenden Kundenbeziehungen durch Cross-Selling ausweiten. Zudem erhalten die Kunden von KMC einen besseren Zugang zu Elektroband, um die steigenden Investitionen in erneuerbare Energien und die zunehmende Nachfrage nach E-Mobilität in Nordamerika zu unterstützen. NMM soll Schritt für Schritt unter der Marke Kloeckner Metals positioniert werden. Das überaus erfahrene Managementteam von NMM mit Carl Grobien und Steve Badyna wird dem Unternehmen erhalten bleiben und das Wachstum weiter vorantreiben.
Weitere Meldungen aus der Rubrik Markt finden Sie > hier.
Source: stahleisen.de
Klöckner pushes ‘transformation’ towards processing in Europe
Klöckner & Co is accelerating its expansion into higher value-added services in Europe, a campaign which it calls a “transformation” of its distribution business.
On the occasion of the announcement of its half-year-results, chief executive Guido Kerkhoff told of several investments into processing, mainly at the company’s German sites.
He emphasised Klöckner’s ambition to “transform commodity warehouses into HVAB [higher value-added business] powerhouses.” The transformation is to a large extent linked with the expansion of laser capabilities. At the company’s headquarters in Duisburg, it will establish a second laser centre with three tube lasers that will complement’s Klöckner’s laser centre in nearby Velten.
Elsewhere, in Kassel, it will invest into a flat-bed laser that will facilitate its entry into the market segment for plate with specific thicknesses. In Bremen, northern Germany, it is about to put into operation an automated vision-guided deburring robot for post plasma-cutting processing. Klöckner claims this facility is unique in Europe and gives it a leadership role for such services.
The company is also pushing investment into downstream services in its other main market, North America (see Kallanish 3 August). In its European market, such ambitions are even more essential, as the company sees little perspective for acquisitions or greenfield sites, unlike in North America.
Christian Koehl Germany