Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Covid-19 and geopolitical uncertainties are likely to impact Acerinox’s earnings in 2020. The Spanish steelmaker expects its Q1 2020 EBITDA to be  in the range of €112mn the same as Q4 2019. 


The company said that the North American market looks strong for business due to low import levels. However, it is uncertain about the competitiveness of its European operations and hopes that anti-dumping duties and anti-subsidy measures against Taiwan, China, and Indonesia by the European authorities would provide some relief. 


The company said its acquisition of VDM Metals announced in November 2019, has already received permission from European and North American authorities. It is still awaiting the green light from Taiwan authorities to close the transaction by the end of Q1 2020.


In 2019, Acerinox’s total steel production declined by 8.6pc due to overcapacity of the product, especially in Asian countries, and a decrease in steel consumption in Europe and North America. The company’s hot rolled steel production dropped by 8pc to 1.9mn mt in 2019 from 2.1mn mt in 2018 while cold rolled steel production fell by 8.3pc to 1.6mn mt in 2019 compared to 1.7mn mt in 2018.


The steelmaker’s melt shop steel production also dropped by 9pc to 2.2mn mt in 2019 from 2.4mn mt in 2018 while its hot rolled long product output decreased by 13.8pc to 219,557mt from 254,629mt in 2018. 


The company’s steel production in Q4 2019 was also down compared with the same prior year period. Hot rolled steel production in Q4 2019 dropped by 5pc to 434,085mt from 458,000mt in the previous year’s fourth quarter, while the cold rolled steel production dropped by 7pc to 349,748mt in Q4 2019 from 377,000mt in Q4 2018. 


Melt shop production in Q4 2019 fell by 5pc to 490,734mt from 516,000mt in the same period in 2018. Hot rolled long products output in Q4 2019 dropped by 24pc to 45,306mt from 60,000mt in Q4 2018. 


The average net sales for 2019 dropped by 5.1pc to $5.2bn from $5.5bn in 2018. The total EBITDA dropped by 16.3pc to $400.4mn from $528mn in 2018. 

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