Aperam’s steel shipments fell by 19pc to 376,000mt in Q2 from the prior year quarter and dipped by 14pc from Q1. The company expects demand and raw material challenges to continue in Q3. In H1, steel shipments fell by 14pc to 790,000mt from the prior year period.
Procuring raw material, especially nickel has become difficult following Indonesian’s ban on nickel exports, stated the company’s earnings release. Volatility in nickel prices and over dependency on main suppliers is challenging. The company estimated global cold-rolled stainless steel production is to have fallen by 12pc from Jan-June with every country witnessing a downfall due to COVID-19.
Shipments declined as a result of the COVID-19-induced drop in demand but improved performance of its Brazil unit has allowed the company to remain profitable and cash generative. Demand has started to recover, but is way below normal historic levels, according to the release. Unrevised quotas continue to support the company’s imports.
Aperam’s alloys and specialties segment fared better than other segments due to a combination of stable volumes, less negative raw material valuations and lesser impact of the closures due to the pandemic which impacted Q1.
The company posted net revenue of €818mn ($961mn) in Q2, a fall of 25pc from the year prior quarter and 14pc from Q1. Operating profits fell 48pc to €49mn from the prior year and 30pc down from the prior quarter.
Aperam has an annual capacity to produce 2.5mn mt of stainless and specialty steels. The company has six production plants spread across Brazil, France and Belgium.
($1=€0.85)