Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Steel dust and aluminum salt slags recycler, Befesa, kept its EBITDA guidance for the year unchanged at €100-135mn, citing better expectations on metals pricing and volumes in H2 2020. 


The company, while reporting its earnings on July 31 also kept its production rates at 80-90pc capacity utilization amid expectations of improved crude steel production in the EU through the rest of the year. Two steel dust recycling plants being constructed in China’s Jiangsu and Henan provinces are expected to get completed on time by early- and mid-2021, respectively. 


In H1 2020, Befesa’s electric arc furnace (EAF) steel dust recycling volumes rose by 7.4pc to 341,238mt from 317,744mt, during the first six months of 2019, due to additional volumes from its Turkish steel recycling plant expansion in the year. In Q2 2020 EAF steel dust volumes increased by 4.6pc to 155,581mt from 148,777mt during the same quarter last year. The average plant utilization rate stood at 82.1pc in H1 2020 and at 76pc in Q2 2020. 


The company’s recycling volumes for aluminum salt slags fell by 9pc to 230,438mt in the first six months of 2020, from 253,152mt in H1 2019. In Q2, volumes dipped 14.8pc to 105,741mt from 124,057mt in Q2 2019. Capacity utilization remained at 80pc or above despite decreasing demand due to the COVID-19 pandemic.


Befesa’s aluminum alloys segment also recorded lower output in H1 2020, falling by 15.7pc to 79,255mt from 93,995mt in the first six months of 2019 and declining by 31.9pc to 31,336mt in Q2 2020, from 46,030mt in Q2 2019. 


The company’s consolidated revenue decreased by 13.7pc to €301.2mn ($354.02mn) in H1 2020 from €349mn in H1 2019 and dropped by 28.1pc to €122.2mn in Q2 2020 from €169.9mn during the same quarter last year due to lower zinc and aluminum prices. 


Broken down by business segment, the company’s steel dust recycling revenue decreased by 6.2pc to €175.5mn in H1 2020, from the same period last year and fell by 19.3pc to €74.3mn in Q2 2020 compared with Q2 2019. The revenue declines were driven by lower zinc spot prices which fell by 23pc in the first half of 2020 and by 28pc in Q2 compared with the prior-year periods. 


The company’s aluminum slags revenue fell by 10.6pc in H1 2020 to €37.9mn from the first six months of 2019 and declined by 21.4pc to €15.8mn in Q2 2020 from the same period last year due to volume decreases and downward pressure on aluminum prices. 


Reduced demand from the automotive sector due to the pandemic impacted Befesa’s aluminum alloys segment’s sales. The company reported a revenue decrease of 24.7pc to €105.2mn in H1 2020 and a fall of 41.6pc to €39.8mn in Q2 2020 compared with the same 

periods last year.


The company’s consolidated EBITDA in H1 2020 declined by 31pc to €55.3mn from €80.1mn in H1 2019 and reduced by 41.4pc to €21.7mn in Q2 2020 from €37.1mn during the same quarter last year.


(1$ = €1.17)

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