tk’s US distribution business outperforms Europe counterparts

Steel sales at thyssenkrupp’s distribution division in the first half of its business year, 1 October to 31 March, performed better in North America than in Europe, Kallanish hears from the company.

The business unit Materials Services, combines stockholding distribution and trading, in various regions and countries. It reports that strong warehousing business in North America outperformed weaker service centre business in Europe and direct-to-customer business worldwide.

In total, the unit’s order intake was at the same level as one year earlier, at €7.1 billion ($8.0 billion). Revenues were also around €7.1 billion in both periods, due to strong volumes and prices in North America, while volumes delivered dropped from 5.6 million tonnes to 5.0m tonnes.

The group attributes the fall in demand in Europe particularly to declining volumes in auto-related service centres and direct-to-customer business. Operating profit (adjusted Ebit) of the distribution division fell from €151 million to €75m, due to margin pressure from declining prices particularly in warehousing and distribution. This compared with positive effects from dynamic price increases seen in the prior-year period.

The unit also temporarily includes stainless mill Acciai Speciali Terni (AST), where volumes and prices at AST were lower year-on-year mainly due to continuing import pressure from Asia. It notes that stainless steel prices have been recovering slightly since March after having falling in the first five months of the financial year. Finished steel prices stabilised towards the end of 2nd quarter and the overall average price level was lower on-year.