SSAB expects to report lower earnings for fourth quarter due to decreased volumes and falling prices in Europe and North America but is looking forward to better market conditions in Q1.
Market conditions have deteriorated further than expected from the previous forecast for fourth quarter. Plate and strip market prices fell sharply during the quarter impacting earnings in SSAB Europe and SSAB Americas. Volumes are expected to be lower than third quarter and down significantly on a year-over-year basis.
“Customers in both Europe and the USA have adopted a wait-and-see sentiment, and have chosen to destock against a backdrop of falling prices,” writes SSAB in their Q4 guidance.
“High volumes of imports from Asia and Eastern Europe outside the EU during 2015 have had a serious negative impact on volumes.
Fourth quarter EBITDA for the company is expected to be between SEK 50 and SEK 250 million with an operating loss between SEK 900 and SEK 700 million ($105.7 million and $82.2 million).
SSAB expects demand to pick up in North American in first quarter as a result of low inventory at distributors. SSAB recently increased their price for heavy plate. Scrap prices are expected to remain low.
Overall shipment volumes are expected to increase in Q1 2016 compared to fourth quarter 2015.
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