French tube maker Vallourec forecasts higher H2 2025 shipments, EBITDA
France’s Vallourec expects international tube shipments to increase in the second half of 2025 compared to H1 2025 on strong bookings over recent months, it said in its fourth-quarter and full-year earnings call on Feb. 27.
The company forecasts EBITDA per metric ton to further improve in H2 2025 compared to H1 2025 on higher international prices and triggered by the US market price improvements and cost savings.
In the Mine and Forest unit, production sold is expected to be around 6 million mt of iron ore with the profitability determined by prevailing iron ore market prices.
“Our bookings in both the US and international markets ended 2024 on a high note, evidence of the strong global demand for premium tubular solutions,” CEO Philippe Guillemot said.
“We have seen a steady improvement in US pricing over the past several months, which will begin to manifest in our first quarter results … While we are still analyzing the full impact of recent changes in US trade policy, we believe on the whole they will support further upside in the US market,” Guillemot added.
Vallourec sold 362,000 mt of tubes in Q4, down 8.3% quarter over quarter and 5.5% year over year. Sales fell 16% year over year to 1.29 million mt of tubes for 2024, weighed by the closure of the Germany still mill and lower volumes sold in North America.
Tubes EBITDA fell from Eur1.05 billion ($1.36 billion) in 2023 to Eur777 million in 2024, due to lower profitability in North America despite higher market pricing in the rest of the world and the benefits of a restructuring plan.
In Q4, iron ore production was at 1.3 million mt, stable quarter over quarter but down 24% year over year. Full-year production dropped 22% year over year to 5.4 million mt, while Mine & Forest EBITDA fell to Eur108 million from Eur180 million on lower sales volumes and realized prices, and higher costs.
The bottom line was still better than the guidance set by Vallourec, benefiting from higher-than-expected iron ore prices and production sold in the final quarter.
Platts, part of S&P Global Commodity Insights, assessed the 62% Fe Iron Ore Index at $105.85/dmt CFR North China on Feb. 27, down $1/dmt from Feb. 26, in line with Newman High Grade Fines trade and tradable values.
According to Platts, iron ore prices in 2024 moved from $143.2/dmt CFR North China on Jan. 2 to $100/dmt CFR North China on Dec. 31.
Vallourec sells former German plant property
Vallourec has entered into an agreement to sell the majority of its Düsseldorf Rath property to CTP, Europe’s largest publicly-listed industrial property developer, Kallanish learns from the French pipemaker.
This will involve the sale of the approximately 900,000 square meter property for €155 million ($126.6m). The site was home to Vallourec’s primary tube production operations in Germany, which closed at the end of 2023 as part of the New Vallourec plan.
The transaction is expected to close around year-end, subject to customary closing conditions, including CTP’s receipt of the waiver of the city’s pre-emption right, the pipemaker notes.
“This transaction marks a major milestone for Vallourec, as we have now finalised the closures and sales of all of the major European assets targeted by the New Vallourec plan in less than three years,” says Vallourec chief executive Philippe Guillemot. “As a reminder, 80-100% of cash flows generated in the second half of 2024, including the proceeds from the sale of this facility, will be eligible for return to shareholders.”
Earlier, Vallourec announced it is divesting a logistics hub in Indonesia as part of its initiative to concentrate on its main operations (see Kallanish passim). The pipe manufacturer plans to divest its interests in PT CPPI and PT SCN, referred to as the Logistics Group, to CKB Logistics, a subsidiary of ABM Investama Tbk, for an estimated €20m.
Vallourec is also partnering with Advanced Supply Management Operations (Asmo), a joint venture between DHL and Saudi Aramco formed earlier this year, with a view to increasing its Middle East and North Africa market share.
Svetoslav Abrossimov Bulgaria
Hüttenwerke Krupp Mannesmann owners prefer sale over stake increase
Salzgitter and thyssenkrupp Steel, co-owners of Hüttenwerke Krupp Mannesmann (HKM), have no interest in taking over the 20% stake in the Duisburg mill still owned by Vallourec.
In fact, thyssenkrupp Steel, the largest owner with 50%, has now made it clear that it also wants to divest its stake. “We are aiming for a sale of [our stake in] HKM,” thyssenkrupp chief financial officer Jens Schulte told Kallanish during a conference call on Wednesday. He referred to a statement to that effect made last week by Sigmar Gabriel, the supervisory board chairman at tk Steel.
The decision makes sense from the view of thyssenkrupp, given the company recently decided to reduce its capacity and intends to sell 50% of its tk Steel division to EPCG. The Czech energy group recently bought an initial 20% and continues negotiations to take another 30%. While thyssenkrupp and EPCG did not disclose details of the transfer, Manager Magazin writes that EPCG paid €140 million ($155m) for its 20%, citing inside sources.
As far as Salzgitter is concerned, its chief executive, Gunnar Groebler, said on Monday the company does not intend to increase its 30% shareholding in HKM, although it earlier expressed an interest in doing so. Salzgitter has not specified if it wants to divest or keep it stake.
Pipemaker Vallourec has long kept its stake because HKM’s slab is ideal for making tube. It was however reported last year to be seeking to divest its interest. Retaining the stake would be a reasonable path for Salzgitter, too, considering its Mannesmann Tubes business, in addition to the obvious kinship of roots in the traditional Mannesmann company.
Christian Koehl Germany
