CHICAGO Commercial Metals Co.s (CMCs) steel
mill in Zawiercie, Poland, continues to be hit hard by a
deluge of imports and slack demand resulting from
the European economic crisis, CMC executives said Monday.
CMC Zawiercie SA (CMCZ), the Irving, Texas-based
steelmakers Polish subsidiary, recorded adjusted
operating income of just $876,000 in its fiscal 2013 first
quarter compared with $9.8 million in the year-ago period, CMC
chief financial officer Barbara Smith said during a conference
call to discuss earnings results Monday.
CMCZs fiscal-first-quarter volumes declined 8.7 percent
year over year to 345,000 tons, while sales margins slid 2.2
percent to $223 per ton in the same comparison, Smith said.
Billet production, which the company often turns to during
flat times, also fell sharply, she added.
This segment continues to be affected by the unsettled
eurozone crisis and import pressures from neighboring
geographies, Smith said.
An influx of imports to the Polish market, mostly from new mill
startups in Eastern Europe, started having an impact about a
year ago, CMC chairman, president and chief executive officer
Joseph Alvarado said. All of our domestic competitors in
Poland were impacted by this deluge of imports, Alvarado
said. We continue to lobby for ... fair trade
in Poland, but were still seeing import pressure.
A combination of a slow government response to the trade issue
and slack demand has put pressure on all mills in Poland,
Alvarado said. But while imports could abate with
government support, CMCZ must still contend with a
seasonally weak period that usually comes with winter weather
in Poland, he said.
CMC executives in general suggested that they were disappointed
by results from overseas operations.
We continue to face economic challenges in most of the
international markets, Alvarado said. The companys
operations in Poland in particular are struggling and
need to improve, he said. And in Australia, CMC has been
hit by a general malaise, he said.
Weve invested recently in both of those areas, and
we want to capitalize on the investments that weve
made, Alvarado said.
CMC recorded overall net income of $49.7 million for the three
months ended Nov. 30 (
amm.com, Jan 7