Steel Mills

SSAB Americas Sees Operating Loss Due to Mobile Mill Maintenance

April 25, 2017

Swedish steel mill SSAB posted an operating profit of SEK 702 million for the first quarter 2017 ($79.2 million). Higher prices and increased shipments at SSAB Europe helped drive profits for the company.

SSAB Americas also saw an increase in realized prices during first quarter and stronger margins as scrap metal prices increased. A maintenance outage in Mobile, however, resulted in lower shipments than Q4, leading to an operating loss for the quarter. SSAB reported continued good demand from the energy industry.

Shipments were up 2 percent compared to Q1 2016 but down 3 percent compare to Q4 2016. External shipments totaled 486,000 tonnes.

SSAB Americas reported sales of SEK 3,019 million ($340 million), a seven percent increase from fourth quarter 2016 and a 24 percent jump from Q1 2016, and an operating loss of SEK 157 million (-$17.7 million). Higher variable costs (including higher scrap costs and maintenance outage) were partly offset by higher prices during the quarter.

SSAB Americas is expecting good demand for heavy plate from both end customers and distributors in second quarter, as well as better margin spreads.

During the earnings conference call, Martin Lindqvist, SSAB AB – CEO, President and Director, was asked if he sees any risks in the U.S. given the increased protectionist policies.

Replied Lindqvist, “What will be the case in U.S. after the announcement yesterday? I think it’s too early to tell. I don’t really know, but — for the Automotive volumes. But overall, I would say everything. We are the biggest plate producer in North America and one of the big steel companies in North America. So everything else equal, what is good for the U.S. steel industry is obviously good for SSAB as well, overall.”

Although the executives on the call did not have a total volume for steel sold from Europe into the U.S. market, Lindqvist noted, “Just to clarify, the majority of the volumes we sell in U.S., we produce in the U.S. with the exception of Automotive, but the majority of all the other volumes are produced locally.”

About SSAB Americas:
SSAB Americas is the largest producer and supplier of steel plate in North America with steel mills located in Mobile, Alabama and Montpelier, Iowa. Both mills utilize a scrap-based, electric arc furnace method to produce steel and have a combined annual production capacity of 2.4 million tonnes. In addition to the two steel mills, SSAB Americas has three cut-to-length facilities located in Houston, Texas; St. Paul, Minnesota; and Toronto, Ontario (Canada).