Acerinox expects higher earnings on improved inventory

Spanish stainless steel producer Acerinox forecasts higher earnings in the second quarter as a result of "reasonable" US inventory levels, despite a decline in production from the prior year period.

The company expects US stainless steel distributor inventories to remain at current levels, which stood at 2.9 months of stock at the end of the quarter.

Acerniox total steel production decreased by 7pc to 1.6mn metric tons (t) in the first quarter from a year earlier.

Melt shop production fell by 6pc to 627,920t in the first quarter. Hot-rolled steel production declined by 8pc to 531,074t, and cold rolled steel production decreased by 8.5pc to 422,361t. Output of long products increased by 2pc to 66,000t.

Revenue declined by 4pc to €1.2bn ($1.35bn) in the first quarter compared to the year earlier period. Profit for the quarter fell by 44pc to €33mn, compared to the prior year.

Raw material prices for nickel and ferro-chrome rose in March after bottoming out at the beginning of the quarter. The price increases will be recognized in alloy surcharges in the second quarter.