SSAB expects steel European demand to recover by the end of the year, following three quarters of subdued growth stemming from the COVID-19 pandemic.
The Swedish steelmaker noted that the market was still riddled with uncertainties relating to the pandemic, but shipments from its operations in the Americas and Europe could improve thanks to the anticipated rise of high-strength steel demand around the world in the next quarter. This quarter, the firm expects its realized prices to remain level with Q3, though prices in Europe could trend lower because of a lower product mix.
In its Q3 2020 earnings report on Oct 22, SSAB noted that its focus remains on developing fossil fuel-free steel at a plant that began pilot operations last quarter, with an estimated timeline for commercial production to start by 2026. Apart from the pandemic, the company’s Q3 2020 earnings were significantly affected by planned maintenance and weak steel demand.
The company’s crude steel production declined to 5.37mn mt in the first nine months of the year from 6mn mt in January-September 2019, while its rolling production fell to 4.96mn mt from 5.51mn mt, and steel shipments declined to 4.68mn mt from 5.08mn mt.
In Q3 2020, SSAB’s crude steel production declined by 20pc to 1.51mn mt from 1.90mn mt during the same quarter last year. Its rolling products output fell by 15pc to 1.43mn mt from 1.69mn mt, and steel shipments decreased by 9pc to 1.47mn mt from 1.61mn mt.
In January-September 2020, the Swedish firm’s revenue fell by SEK11.10bn ($1.26bn) to SEK48.40bn from SEK59.51bn during the same period last year. Of its total revenue, the specialty steel division contributed SEK12.08bn, declining by SEK2.4bn from January-September 2019. SSAB Europe’s revenue fell by SEK4.5bn to SEK20.48bn, SSAB Americas was down by SEK4.06bn to SEK9.8bn during the same period under comparison.
In Q3 2020, SSAB’s consolidated revenue declined by SEK4.3bn to SEK14.48bn, of which SSAB Europe contributed SEK6.15bn, followed by SSAB Specialty Steel at SEK3.56bn, and SEK Americas reporting SEK2.71bn in revenue.
The firm reported an operating loss of SEK973mn in Q3 2020 compared with a profit of SEK300mn in the same quarter last year, while its net loss stood at SEK734mn compared with a profit of SEK184mn during the same period.