3Q demand outlook strong: SSAB

Swedish steelmaker SSAB is expecting strong steel demand in all global markets for the third quarter, despite the usual European seasonal slowdowns, according to its latest interim report.

End-user demand, in addition to customer restocking, is expected to keep demand buoyant, SSAB said, even when accounting for the usual seasonal slowdown in European markets.

Planned maintenance on SSAB Special Steels and SSAB Europe facilities will see activity fall in the third quarter, coinciding with the seasonal lull. Shipments are expected to be significantly lower in both segments as a result. The group expects SSAB Americas' shipments to remain stable.

Prices will also continue to climb in the third quarter, the company said, expecting "significantly higher" levels compared to the second quarter this year in both its European and US segments. Rising prices will be partly offset by higher raw material costs, primarily iron ore. Realised prices for SSAB Special Steel are expected to increase more modestly.

This comes off the back of rising production and shipments in April-June. The company's crude steel production rose by 22pc on the year in the second quarter, also up by 3pc on the first quarter of 2021. Steel shipments sharply increased by 31pc on the year, rising 1pc on the first quarter.

Demand rose the most in Europe, where SSAB Europe shipments increased by 285,000t on the year to 1.29mn t in the second quarter. SSAB Special Steels and SSAB Americas recorded more modest growth, of 122,000t and 34,000t, respectively.

This translated into the company's highest ever operating profit of 4.08bn kronor ($470mn), up from a SKr201mn ($17mn) loss in the same period last year, driven by strong demand, high steel prices, and stable production, chief executive Martin Lindqvist said.

By Sam Angell