Steel Mills
SSAB Americas Sees Demand and Profits Fall in Q2
Written by Sandy Williams
July 25, 2020
SSAB Americas’ third-quarter results were impacted by lower prices and volumes, which were somewhat offset by cost savings and lower raw material prices. SSAB Americas posted an operating loss of SEK 10 million ($1.13 million) versus a profit of SEK 106 million ($12 million) in the first quarter. Sales totaled $3.2 billion SEK ($361 million) down 17 percent from Q1 and 29 percent from Q2 2019. The division shipped 460,000 metric tons during the quarter, down 3 percent from Q2 and down 13 percent from a year ago.
SSAB reduced fixed costs at SSAB Americas by more than 100 million SEK. Planned maintenance at Montpelier was moved into June and July and was less extensive than planned. The impact from downtime will be reflected mostly in Q3 results.
The heavy plate market in North America weakened as many customer segments sharply reduced production due to the pandemic. Customer demand was impacted by COVID-19 in several of SSAB Americas’ markets, including construction machinery. Wind power and marine applications in heavy transport showed relative strength during the quarter. Market prices for heavy plate fell at the start of the quarter but subsequently recovered. U.S. scrap spot prices remained at low levels during the second quarter. Service centers remain cautious and distributor inventories continue to be at low levels.
Looking forward, Q3 shipment levels for SSAB Americas are expected to be the same as Q2 with prices relatively stable.
(Note: 1.0 SEK = 0.11 USD)
Sandy Williams
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