Steel Mills
SSAB Q3 Profits Surge; Mobile Mill Moved to Special Steels Division
Written by Michael Cowden
October 26, 2021
Swedish steelmaker SSAB posted record earnings again in the third quarter thanks in part to sharply higher plate prices in North America.
But while North American demand is expected to remain strong in the fourth quarter, that in Europe is anticipated to soften because of the automotive chip shortage – which has dented vehicle production on the continent, the company said.
SSAB produces sheet at its mills in Europe. Its U.S. operations – one in Mobile, Ala., and another in Montpelier, Iowa – produce plate.
As regards U.S. operations, the company said it has moved its plate mill in Mobile from its Americas division to its Specialty Steels division. The change, which occurred in the third quarter, will allow the Mobile mill to increase its focus on high-strength steel, SSAB said in commentary released with third quarter earnings data on Monday, Oct. 25.
“The new organizational setup will provide a specialization of the American sites, allowing a clearer focus for future development and investment,” the company said.
All told SSAB recorded a profit of $4.48 billion Swedish krona ($520.1 million USD) in the third quarter of this year compared to a loss of $734 million SEK ($85.2 million USD) in the third quarter of 2020 on sales that rose 74.1% to $25.2 billion SEK ($2.9 billion USD).
“We were, during the third quarter, in control of the order intake, which we typically are when prices are moving up,” SSAB President and CEO Martin Lindqvist said of North American prices during a conference call with analysts.
Lindqvist was also asked about the premium that hot rolled coil commands over plate and that has persisted for about a year. The situation is unusual because plate typically commands a premium to sheet.
“Plate has always had a premium compared to HRC,” Lindqvist said. “We haven’t seen (that premium) I think it’s the last three, four quarters. If that will normalize or not, I think it’s a good question. And I can’t really answer it.”
“But having said that, plate prices are … on very high levels as well,” he added.
Hot-rolled coil was at $1,910 per ton ($95.50 per cwt) and plate was at $1,800 per ton when this article was filed – meaning that coil carried a premium of $110 per ton to plate.
Prices for the two products were roughly at parity a year ago – when sheet was at $685 per ton and plate at $660 per ton, according to SMU’s interactive price tool.
In October 2019, in contrast, hot rolled coil was at $470 per ton and plate at $675 per ton – giving plate a more traditional $205 per ton premium over sheet.
On the operations side, SSAB shipments in the Americas would be lower because of an outage.
SMU reported this summer that SSAB would take a three-week outage at its Mobile mill in late November and early December.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
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