Europe steel market bottoms out after Q4 loss - SSAB

09/02/2014 09:42 AST

High strength steel maker SSAB reported its sixth straight quarterly loss but said prospects for steel makers were slightly better and that even the hard hit market in Europe had bottomed out.

While steel makers have been battling weak steel prices and demand for several years, an economic recovery across much of the world has improved sentiment recently, though overcapacity at about 200 million tonnes of steel a year globally is likely to continue to dampen prices.

Sweden's SSAB, which agreed last month to buy rival Rautaruukki Corp to gain scale and efficiency, said that positive trends were visible in North America, where it has increased prices and in Asia, despite slowing growth in China.

Even Europe, the hardest hit region where steel consumption fell by about 4% last year and was around 30% below a 2007 peak, is showing signs of picking up. The European market was weak in 2013 but there are indications that the market has bottomed out.

Eurofer, Europe's regional steel association expects EU consumption to rise by around 3% in 2014 as the pace of economic recovery grows. SSAB's operating loss was SEK 282 million compared to a loss of 665 million in the same period a year ago and an average forecast loss of 154 million crowns in a Reuters poll.

The company said that a maintenance outage in Mobile in the United States would have a negative effect on shipment volumes ahead and would reduce earnings to the tune of 150 million crowns over the Q1 and Q2.

Reuters