Steel Mills

SSAB U.S. Running at Full Capacity

September 27, 2014

All of SSAB’s U.S. facilities are running at full capacity according to SSAB CEO Martin Lindqvist. In an interview with Bloomberg, the head of the Swedish steel company said the “re-industrialization” of the U.S. and improved demand from the energy, automotive and heavy transport sectors is boosting profitability for SSAB’s US operations.

North American orders for third quarter are fully booked, said Lindqvist, and orders for the coming orders are “fairly OK.” Energy cost savings from shale fracking has helped to normalize margins that were squeezed one year ago. “I claimed at that time that we will again see margins on the historical average and that is what we roughly see today,” he said in the Bloomberg article.

Lindqvist noted that the European market has bottomed out but is not trending downward. He is forecasting flat business conditions with growth in pace with GDP.

The SSAB/Rautauruukki merger was approved by the European Commission in July but required divesture of certain assets. If steel demand remains stable, Lindqvist expects the deal to generate cost synergies of as high as $1.4 billion kronor within three years. If demand should weaken SSAB could idle some of its five blast furnaces and look at further divestures as cost savings measures. (Source: Bloomberg)