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SSAB forecasts 'significant' demand decrease in Europe in Q3

Swedish steelmaker SSAB says demand in Europe weakened in the second quarter and there is a risk of a more pronounced downturn than usual in the third quarter.

SSAB forecasts 'significant' demand decrease in Europe in Q3

Demand for high-strength steel remains good, while customers are more cautious.

Compared with the second quarter, SSAB Special Steels' shipments in the third quarter are expected to be slightly lower due to a slightly weaker market as well as the planned maintenance outage at Oxelösund.

SSAB Europe's shipments are expected to be significantly lower due to planned maintenance and a weaker market. Prices are expected to be lower in Q3 compared to Q2. Raw material costs are expected to be slightly lower than in the previous quarter, mainly due to lower coal prices.

SSAB's consolidated shipments in Q2 increased by only 0.6% y-o-y to 1.72 million tonnes, despite crude steel production increasing by 5% to 2.09 million tonnes. Consolidated revenue was down 11 per cent y-o-y to SEK 31.8 billion ($3.06 billion), while net profit was halved to SEK 3.9 billion. Results were down compared to last year's record level due to a weaker market for SSAB Europe, Tibnor and Ruukki Construction.

SSAB Europe shipments increased by 8% to 907,000 tonnes in Q2, while crude steel production increased by 18% to 1.14 million tonnes. Production constraints were seen in the previous year's quarter. Shipments to the Automotive and Heavy Transport customer segments remained good, while the Construction sector remained weak. However, the outlook remains uncertain.

SSAB Europe's revenue decreased by 10 per cent to SEK 12.9 billion and the adjusted operating result decreased by more than 80 per cent to SEK 764 million. First-half consolidated revenue was down 5% y-o-y to SEK 63.7bn, while net profit decreased 46% to SEK 7.6bn. Shipments increased by 2% to 3.46 million tonnes and crude steel production by 11% to 4.14 million tonnes.

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