Austrian steelmaker Voestalpine is expecting lower steel shipments to the automotive industry until the end of 2021 as the car industry is being hampered by components issues, the company said Aug. 4.
On a call for the company’s April-June results, CEO Herbert Eibensteiner said stoppages to car production were more prevalent in Europe than other regions such as China or the US.
“We will prepare for the case that volumes will go to other customers and supply less than initially thought to the automotive industry,” Eibensteiner said.
Demand in the European steel market remained strong overall during the quarter, the first of the company’s financial year, with steel production at maximum capacity, according to Voestalpine.
Apart from the aerospace industry and “hiccups” in the automotive industry, all customer groups showed continuous growth. Consumer goods, white goods and mechanical engineering industries continued to benefit from the market momentum that carried over from the end of the previous quarter. This also applied to the construction industry, which returned to high capacity utilization after the seasonally weaker Northern winter months.
Voestalpine said that supply chain inventories remained at record low levels while steel prices rose in the European spot market.
S&P Global Platts’ assessment for hot-rolled coil on an EXW Ruhr basis rose from Eur860/mt on April 1 to Eur1,177.5/mt on June 30. The daily assessment stood at Eur1,165/mt EXW Ruhr Aug. 4.
The heavy plate industry continued to lag behind the positive developments for other flat steel products, only improving due to higher crude oil prices.
The seamless tubes segment however was able to benefit from the improving oil and gas industry.
Higher prices for raw materials led to substantial cost increases in steel production but the steel division “more than just offset the higher raw materials prices through higher steel prices”, according to Voestalpine.
The steel division’s EBITDA soared to Eur263 million in the reporting period, up from last year’s Q1 at Eur68.2 million, which was then heavily impacted by pandemic-related demand drops.
For the business year 2021/2022, Voestalpine expects an EBITDA between Eur1.9 billion and Eur 2.2 billion, up from Eur1.1 billion in the business year 2020/2021.
— Laura Varriale