Steel Products
Klockner Expects Kloeckner Metals in U.S. to Boost Corporate Profitability
Written by Sandy Williams
March 8, 2013
Written by: Sandy Williams
Klockner and Co. is undergoing a major restructuring program to shrink its European line to a profitable core by eliminating 60 sites, 40 of which have already been sold or closed. Klockner EBITDA before restructuring was €139 million in 2012 (down from €227 million in 2011) and €62 million after restructuring. The Company forecasts 2013 EBITDA of €200 million with €60 million coming from restructuring. Currently, the U.S. generates 40 percent of Klockner sales and expects that share to increase to 50 percent in the next year.
In the U.S., the company completed integration with Macsteel Service Centers USA under the umbrella of Kloeckner Metals and increased turnover by 30.8 percent 2012. Sales in the U.S. are expected to show organic growth of about 10 percent in 2013. Construction related sales account for about 40 percent of customers in the US, but with the start of the new service center in Alabama, Klockner expects automotive to increase from 4 percent to 10 percent. The acquisition of Macsteel was attributed to an 11 percent increase in U.S. flat steel sales in 2012. Alabama sales volume is expected to grow to €150 million in 2014.
CEO Gisbert Ruhl said, “With the three directions of thrust comprising growth in the USA, stabilization of profitable and restructuring of the remaining activities in Europe, we have adapted our strategy to the current challenges. As a result, despite the ongoing difficult environment, we are well equipped to increase our earnings power and to continue growing in the USA.”
Ruhl said there are no plans to make further investments in emerging markets and the company focus will be on the US market where opportunities are available in natural gas. No large acquisitions are expected in the near future.
“We are buying here and there a niche player that would support our exposure, for instance, to shale gas, to shale exploration and reshoring,” said Ruhl.
Klockner expects the U.S. market to be up +3 to +4 percent and expects to outgrow the market again this year. Ruhl says growth is not only in the contractual business but also in spot business which is very much related to cross selling effects. “We are providing every region in the U.S. all kinds of steel, flat, rolled, plate—it gave us an additional push last year and this is why we expect to grow the U.S. market again very significantly,” said Ruhl.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Products
Mexico’s TYASA breaks ground on SBQ rolling mill
Mexican steelmaker Talleres y Aceros (TYASA) broke ground this month on the construction of a new special bar quality (SBQ) rolling mill in the state of Veracruz.
Biden hikes tariffs on Chinese goods, including steel and aluminum
The Biden administration announced a series of actions on Tuesday targeting China’s "unfair" trade policies. These actions will, among other things, make imports of steel and aluminum from the Asian nation even more prohibitive.
Nucor holds weekly HRC price steady after last week’s cut
Nucor chose to hold its consumer spot price (CSP) for hot-rolled (HR) coil steady this week after stunning the market last week with a significant price decline. The steelmaker said in a letter to customers on Monday morning that its $760-per-short-ton (st) CSP base price for HR coil is effective immediately. The price is unchanged from the CSP announced on May 6 but down $65/st from $825/st April 29.
US CR tags ease, premium over imports still high
Offshore cold-rolled (CR) coil prices remain much less expensive than domestic product, even as domestic prices have slipped to a six-month low, according to SMU’s latest check of the market.
Steel imports strengthen through April licenses
March 2024 represents the third highest monthly steel import rate seen over the prior year.