Madrid-based
stainless steel producer Acerinox S.A. says it shipped less metal in this
year’s third quarter, citing “weakness in apparent demand once the inventory
rebuilding process was completed” among some of its customers.
Comments Acerinox CEO Bernardo Velázquez, “The change in our
customers’ expectations has caused inventories to be high in most markets, starting
a regularization process, which we expect to be completed by the beginning of
2023.”
In the United States, where the company operates the North America
Stainless (NAS) mill in Kentucky, Velázquez says, “The outlook for the American
market, our main market, is positive, while the European market is dominated by
uncertainty due to the war and high energy prices.”
The CEO adds that “the high-performance alloys market continues to
develop positively,” with the company’s earnings presentation citing the oil
and gas, chemicals processing and aerospace markets as the largest buyers of
those alloys.
In the third quarter, the slump in Europe took a major toll on the
company’s output. Acerinox says in the August through October period, its melt
shops globally made slightly more than 500,000 metric tons of metal. That figure
is 22 percent lower than output in the third quarter of 2021, and 19 percent
lower than output in the prior quarter.
The combination of reduced output and high energy costs in Europe
damaged the bottom line of Acerinox, but the firm has nonetheless reported
profits.
The company reports earnings before interest, taxes, depreciation
and amortization (EBITDA) of 241 million euros ($240.8 million). That result,
says Acerinox, is down by 18 percent compared with the third quarter of last
year down 54 percent from the prior quarter. “The EBITDA margin amounted to 11
percent” in this year’s third quarter, adds the company.
Looking ahead, Velázquez points to NAS and VDM high-performance
alloys operations in the U.S. as a likely bright spot in the fourth quarter of
this year and into 2023. VDM Metals, which Acerinox acquired in 2020, operates
five specialty alloys melt shops in Europe and two in the U.S.
“Our main market, the United States, maintains a better tone than
the rest of the markets,” says Velázquez regarding the near-term outlook for
Acerinox. “This is expected to continue in the coming months.”
Continues the CEO, “The European market is suffering from the
uncertainties arising from the conflict in Ukraine and the energy crisis and
its consequences for European industry.”
Regarding the VDM melt shops, Velázquez comments, “The
high-performance alloys sector continues to improve steadily, and the backlog
situation allows us to remain optimistic.”
Despite the slowdown in this year’s third quarter and a forecast
for the fourth quarter of which Velázquez says, “EBITDA will be lower than the
third,” the CEO adds, “The 2022 results will be the best in our history,
demonstrating our ability to take advantage of the good moments in the cycle
and the level of competitiveness achieved.”