Steel Mills

SAAB Americas Has Strong Quarter Despite Challenging Market

April 27, 2015

SSAB reports a relatively weak steel market in the US in first quarter due primarily to high inventory levels at distributors and imports that pressured prices in the North American market. Despite challenging market conditions, sales at SSAB Americas rose 24 percent year over year to $407.8 million (SEK 3,508 million). Sales were relatively unchanged from fourth quarter due to an improved product mix offsetting lower volumes. EBITDA for Q1 was $52.7 million (SEK 453 million).

SSAB Americas shipments were down 4 percent to 476,000 tonnes (525,692 tons) from 496,000 tons (545,737 tons) in Q1 2014. Steel service center demand was weak due to destocking and imports but demand in Heavy Transport remained good driven by demand for tank cars. Steel prices fell by 6 percent from fourth quarter 2014.

Crude steel production was down 9 percent from Q4 and 11 percent from Q1 2014. Steel production was down 8 percent from Q4 and 11 percent from a year ago.

“Apparent use of steel is expected to increase both in Europe and in North America during 2015,” said SSAB in its quarterly earnings report. “Despite weak deliveries to distributors in North America during the first quarter, underlying demand remains good. However, destocking in North America has lasted longer than expected, and demand is not expected to pick up until the end of the second quarter.”

SSAB expects the North American market to continue to be negatively impacted by high inventory and import levels that will continue to pressure steel prices. Demand is expected to be relatively strong during second quarter.

SSAB Americas includes EAFs producing slab from scrap metal at Montpelier, Iowa and Mobile, Ala. with crude steel capacity of 1.4 and 1.3 million tons, respectively. Stamping facilities are located in Houston, St. Paul and Toronto. (1 SEK = 0.12 US Dollar)