Steel Mills

SSAB Americas Earnings Hit by Imports and Low Prices

July 22, 2015

SSAB Americas reported sales of SEK 3,027 million ($351 million) in second quarter, down 14 percent from first quarter and 4 percent year over year. Steel shipments of 471,000 tonnes (519,180 tons) declined 1 percent sequentially and 10 percent year over year.

Crude steel production was down 2 percent from the previous quarter and 8 percent y/y. Steel production was up 1 percent from first quarter but current market conditions resulted in a drop of 9 percent when compared to second quarter 2014.

Earnings fell on weaker pricing and volumes but were mostly offset by lower operating cost. SSAB Americas operating profit was SEK 154 million ($17.9 million), down from SEK 296 million ($34.3 million) in first quarter and from SEK 176 million in 2014.

For the first six months of 2015 sales and operating profit both improved when compared to the same period in 2014. Sales were SEK 6,535 million ($758 million) compared to SEK 5,983 million ($694 million) in the first half of 2014.

SSAB noted that in North America, market prices for heavy plate began dropping in October and continued into beginning of second quarter before leveling out. Import volumes decreased in second quarter but were still at a historical high. Demand was good from Heavy Transport but weaker from service centers that were working to reduce inventory.

“In North America, the destocking seen at distributors during the first half of the year is expected to spill over into the third quarter. Underlying demand from end-customers is considered to be relatively good, but to reflect a certain seasonal downturn,” wrote SSAB in the company earnings report.

SSAB Americas is the largest producer and supplier of and of heavy plate in North America. The company has mills located in Mobile, Ala., and Montpelier, Iowa. The mills produce steel using scrap metal and electric arc furnaces and have a total annual production capacity of 2.4 million tonnes.

Steel Market Update will present its next Steel 101 workshop Oct. 6-7, 2015 in Davenport, Iowa and will tour the SSAB Montpelier, Iowa facility. For more information about our workshop program, instructors, pricing and registration go to www.SteelMarketUpdate.com and look under the Events tab or contact our office: 800-432-3475.