Germany-based steelmaker Salzgitter Group has announced that in the first nine months of the current year the business activities of the company were burdened by the structural crisis in the European steel industry, reflected by persistently fierce price-led competition. The resulting unsatisfactory performance of the steel division, with a nine percent decrease in sales revenues, was also determined by impairment and an unexpectedly high outlay for repair work on a blast furnace. At the same time, the large-diameter pipes business continued to suffer from a severe order shortfall.
In the third quarter, Salzgitter posted a net loss of €67 million, compared to a net loss of €25.7 million in the corresponding quarter of 2012, while the company registered a net loss of €382.2 million in January-September, compared to a net loss of €48.2 million in the same period of the previous year.
Salzgitter's sales revenues amounted to €2.3 billion in the third quarter, down 13.9 percent year on year, while in the first nine months the company's sales revenues decreased by 10 percent year on year to €7.25 billion, mainly due to lower rolled steel selling prices.
In the third quarter, Salzgitter produced 1.52 million mt of crude steel, decreasing by 21 percent, while the crude steel output for the first nine months amounted to 5.3 million mt, down 8.3 percent, both year on year.
According to Salzgitter, there are growing signs in Europe of an emerging economic recovery. Owing to the considerable imbalance between supply and demand, however, this development is as yet unable to have an effect on the situation in the steel industry. The slight recovery in demand, in conjunction with the low inventory levels of traders and consumers, may cause a cyclical firming up of prices. Moreover, raw material prices may at best fall marginally below their level to date. For the whole year, Salzgitter's steel division anticipates declining sales compared to 2012 and a clearly negative pre-tax result.