Steel Mills

Montpelier Outage Hurts SSAB Americas in Q3

October 29, 2016

SSAB Americas, recorded a third quarter operating loss of SEK 73 million ($8.1 million) compared to a profit of SEK 162 million ($18 million) in Q2 2016. The loss was due mainly to the maintenance outage at Montpelier in the third quarter, higher variable costs, lower volumes and lower capacity utilization which was somewhat offset by higher prices. In comparison, profit in Q3 2015 was SEK 78 million ($8.7 million).

The maintenance outage at Montpelier resulted in direct charges of SEK 200 million ($22 million) in third quarter. SSAB Americas also booked a charge of SEK 209 million ($23 million) for settlement in an anti-trust lawsuit against several US steel producers.

Sales for the quarter were SEK 2.545 billion ($282 million), down 10 percent from Q2 2016 and 17 percent from Q3 2015. Demand was weaker in Q3, particularly from steel service centers but demand in the energy segment, driven by the wind power industry, remained good.

External shipments, totaling 421,000 tonnes, were down 20 percent sequentially and down 17 percent year-over-year. Crude steel production and rolling production were down 14 percent and 16 percent from second quarter, respectively, due to the Montpelier outage.

Said SSAB President and CEO Martin Lindqvist, “In North America, demand for heavy plate was weak and prices declined throughout the quarter. This led to reduced orders from Steel Service Centers and lower than expected shipments for SSAB Americas. Imports of heavy plate into the USA remained at a high level. A preliminary decision on import duties on heavy plate in the USA is expected during the fourth quarter. Demand for high-strength steels globally remained stable, although with some seasonal slowdown.”

“SSAB expects demand for heavy plate In North America to remain relatively weak during the fourth quarter, although low stocks are expected to result in increased purchases from distributors.”

Parent company SSAB reported an operating profit of SEK 707 million ($78.4 million) in third quarter 2016, driven by higher prices and cost reductions.
(1 SEK = 0.11 USD)