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STEEL

Swedish steel maker SSAB paints gloomy future

Swedish steel maker SSAB reported a net loss of 636 million kronor ($86 million) in the second quarter and warned of worse to come as demand continues to decline.

Published: 27 July 2009 12:27 CEST

The results, for the period April-June 2009, came in under analyst expectations and in stark contrast to the net profit of 2.6 billion kronor in the corresponding period of last year.

At the operating level, the loss came to 952 million kronor on sales that fell 56 percent to 6.6 billion kronor.

“The steel market continues to be sluggish,” said SSAB chairman Olof Faxander.

“The second quarter has been characterized by weak demand and continued pressure on prices … Production during the quarter has remained well under 50 percent of capacity.”

“During the third quarter, we expect market conditions to be similar to those in the second quarter. We expect that the result for the third quarter will be weaker than for the second quarter, primarily due to seasonal variations as a consequence of our customers’ holiday outages.”

Faxander said that by the end of the year, inventory drawdowns by steel users could lead to a strengthening in demand and an improvement in the market.

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STEEL

German steel giant rejects ‘high cost’ state support

German industrial giant Thyssenkrupp on Friday rejected state participation to support it during the pandemic, an option favoured by unions but judged too costly by management.

Published: 12 December 2020 11:26 CET
German steel giant rejects 'high cost' state support
Thyssenkrupp's offices in Duisberg. Photo: Ina Fassbender / dpa / AFP
“State participation off the table,” Klaus Keysberg, the group's financial director, told the German daily Rheinische Post on Friday.
   
Keysberg blamed “high costs” in the long term of government assistance, “due to the interest payments and the terms of repayment.”
   
Already weakened by years of cut-price competition from China in the steel industry, Thyssenkrupp has further struggled with the effects of the pandemic that caused business activity to plunge.
   
The company said in mid-November it would cut an additional 5,000 jobs as part of its restructuring plan, bringing the total to nearly 11,000, to be spread out over several years.
 
   
Thyssenkrupp chief executive Martina Merz has not ruled out state assistance.
   
The powerful IG Metall union had organised rallies in October to demand a rescue plan from Berlin.
   
But the government was never enthusiastic, despite their acquisition of stakes in the airline Lufthansa and tour operator TUI, which also had business ravaged by Covid-19.
   
“I don't believe that nationalisation is the right response at the moment,” Germany's Economy Minister Peter Altmaier said in October on Thyssenkrupp.   
 
But national and regional governments favour more traditional aid structures, such as subsidies, or moves to convert to production of so-called green steel.
   
Discussions will continue to find alternatives.
   
A takeover of Thyssenkrupp's steel activities is still on the cards. British steel giant Liberty, founded by industrialist Sanjeev Gupta, launched a takeover bid in October.
   
Discussions are also underway with Sweden's SSAB and India's Tata Steel.
   
An alliance with fellow German steelmaker Salzgitter to create a national steel champion is also being considered. But these options won't be decided until “spring 2021”, Thyssenkrupp said.
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