LONDON Acerinox SA, parent company of North American Stainless Inc. (NAS), saw a sharp drop in first-quarter earnings due to falling nickel and stainless steel base prices, the company said April 23.
The Madrid-based stainless producer posted net income of 15.31 million ($19.9 million) for the three months ended March 31, down 47.9 percent from 29.36 million in the same period last year. Sales fell 15.8 percent to 1.04 billion ($1.35 billion) from 1.23 billion in the same comparison due to fewer sales, lower stainless steel prices and nickel weakness.
"Doubts about the economic recovery and prudence on the market have stopped the traditional restocking process of the first quarter," Acerinox said.
The European market suffered a 6.8-percent decline in apparent steel consumption in the first quarter, although Acerinox hopes that Outokumpu Oyjs acquisition of Inoxum Group will bring more clarity to the market.
"We hope that the long merger process between Outokumpu and Inoxum clears up, as well as the sale of (Inoxums) Italian plant, Terni, which is causing a lot of uncertainty," the stainless steel producer said.
"The situation in the American market, Acerinoxs first market, is very different and has grown by 9.2 percent in the first two months of the year," it said. "However, import pressure is hindering expected price increases."
The company said its Americas market accounted for 49 percent of its sales in 2012.
In Asia, where Acerinox saw unchanged levels of activity before and after the Chinese New Year holiday, the company has launched Phase II of its Bahru Stainless joint venture in Malaysia with Japan-based Nisshin Steel Co. Ltd.
The companys first-quarter melt shop production totaled 586,933 tonnes, up 4.4 percent from a year earlier.
A version of this article was first published by AMM sister publication Steel First.