NEW YORK SSAB Americas returned to profitability in the third quarter thanks to recovering plate prices and a gradual improvement in the U.S. economy.
The Lisle, Ill.-based steelmaker, a subsidiary of Stockholm-based SSAB AB, posted operating earnings of 53 million kronor ($8.4 million) for the three months ended Sept. 30 in contrast to a 49-million-kronor loss in the second quarter, although they were down 78.9 percent from earnings of 251 million kronor in the third quarter of last year.
"There is currently a positive momentum in the market," Martin Lindqvist, president and chief executive officer of the Swedish parent, said of the U.S. market environment. "We have seen the spot plate prices in the U.S. recover during the summer, fall off slightly during the latter part of the quarter and now start to move up again. We expect steel consumption and plate consumption to continue upwards according to the market and the general development."
SSAB Americas recorded third-quarter sales of 3.64 billion kronor ($578.9 million), up 3.7 percent from 3.51 billion kronor in the second quarter but down 0.8 percent from 3.67 billion kronor a year ago. The year-over-year reduction in sales was due to lower prices, negative currency effects and a weaker product mix, the company said.
The parent company said in a conference call Oct. 25 that its third-quarter earnings were hit by a 50-million-kronor ($7.9-million) cost related to a planned outage at its Mobile, Ala., facility. The company had previously said it would pull forward part of the outageoriginally planned for the fourth quarterinto the third quarter due to "market reasons," and said it was on target to take the second part of its outage in early 2014.
"We have no planned outages in the U.S. in the fourth quarter," Lindqvist said, adding that the company can decide when to take the outage "depending on market outlooks."
SSAB Americas announced a number of price hikes recently, including a $30-per-ton increase earlier this month and a $20-per-ton hike in the past week (amm.com, Oct. 24). Lindqvist said the increases were necessary to get better value for its products.
"Effective (Oct. 24), we introduced another $20 per ton. The reason why we did that is because we had a strong order book and good order intake," he said. "We will continue, as a market leader, to increase the margin over scrap and help the market do that."