NEW YORK SSAB
Americas, a subsidiary of Swedish steelmaker SSAB AB, posted a
second-quarter lossits first dip into the red in four
yearson lackluster demand, although it expects positive
momentum in the second half of the year.
SSAB Americas posted
an operating loss of 49 million kronor ($7.49 million) for the
three months ended June 30 in contrast to operating earnings of
537 million kronor a year earlier and 87 million kronor in the
first three months of this year.
parent said that the second-quarter loss in the Americas was
due to a planned outage at its Montpelier, Iowa, facility,
along with low inventories at service centers and lower
shipment volumes. However, a recent price hike by SSAB, along
with some of its U.S. competitors, may help financials going
"Demand from (the)
automotive segment remains good and strong, but demand from
other segments remains more stagnant," Martin Lindqvist,
president and chief executive officer of the Swedish parent
company, said during an earnings conference call July 19 about
second-quarter conditions in the Americas. "Service centers are
very reluctant to buy, even during the second quarter ... (and)
inventory levels are low within the service center (segment) as
they have not been restocking during the quarter."
SSAB Americas recorded
second-quarter sales of 3.51 billion kronor ($536.7 million),
down 24.7 percent from a year ago but up 1.4 percent from the
The company said that
it has pushed up a planned outage at its other U.S. facility in
Mobile, Ala., to the current quarter, which likely will affect
third-quarter earnings by some 50 million kronor ($7.64
million). The outage originally was planned to start in the
fourth quarter and continue into the first quarter, but the
company said it moved it up because it expects the market to
strengthen in the fourth quarter.
"When we looked at a
lot of the leading indicators in North America, we can see that
there is an economic recovery going on, and we expect the
market to gradually improve," Lindqvist said. "Our conclusion
was that (the fourth quarter) will be slightly better than (the
third quarter). We did the math and decided to move the outage
into (the third quarter). ... We need an outage every 18
months, or every second year. We just need to be a little
pragmatic when we take them."
The company said that
the U.S. tank rail car business has remained "strong" while the
wind tower business is picking up from very low levels and
transmission towers are fairly strong.
Lindqvist said that
there are bright spots ahead, even if not immediately. "The
fourth quarter looks to be somewhat better than the third
quarter. We dont expect any uptick in the third quarter,
but (it) will be ... on the same level demand-wise as (the
second quarter)," he said.