European steelmaker SSAB expects improved results in the second quarter and full-year 2021 given the strong demand and increasing finished steel prices along with its transition to fossil-fuel-free production.
The company’s shipments from Europe and the Americas are expected to be slightly higher in Q2 2021 while those from its special steel unit could trend down against Q1 2021 levels. Realized prices across all divisions will be higher in Q2 compared to the previous quarter, SSAB noted in its Q1 2021 earnings report on Monday.
For Q3 2021, SSAB expects to ship from the special steels and Europe divisions with no shipments in the Americas, since facilities in the latter region will have major plant maintenance during that period. For Q4 2021, SSAB Special Steel division will undergo maintenance with Europe and Americas shipping material.
Production up
SSAB’s crude steel production increased by 1.1pc to 2.1mn mt in Q1 2021 against the same year-ago quarter as rolling production fell by 1pc to 1.9mn mt. Of the total raw steel production, 55pc was from Europe, 30pc from the Americas, and 15pc from special steel.
Steel shipments rose by 2.8pc to 1.8mn mt in Q1 2021 compared to the same quarter in 2020, with 980,000mt sourced from Europe and 480,000mt from the Americas during the quarter.
SSAB’s revenue rose by 4.7pc to SEK19.6bn (2.3bn) in Q1 2021 with operating profits multiplying more than five times to SEK2bn in the same period against Q1 2020. Revenue from Special Steel constituted 25.9pc, Europe 44.9pc, and the Americas 18.6pc of total revenue. The operating margin increased to 18pc against 10pc in the same prior-year quarter.
The European division’s operating profit stood at SEK758mn while the Americas’ was SEK268mn in Q1 2021, with Europe climbing from zero and Americas up 152.8pc against the same quarter in 2020. Shipments were affected by weather-related issues in North America along with a low opening balance of slab inventories.
Average purchase prices for raw materials increased by 86pc for iron ore and by 48pc for scrap metal while coking coal declined by 16pc, in dollar terms in Q1 2021 against the same quarter a year ago.
SSAB’s HYBRIT plant is scheduled for completion in 2026 and its capacity will amount to 1.3mn mt of fossil fuel-free sponge iron for feedstock. SSAB has a goal to be fossil fuel-free by 2045.
($1=SEK8.37)