Swedish advanced iron ore products producer LKAB has issued its financial results for the second quarter and the first half of 2010, stating that high demand for LKAB's iron ore products persisted through the second quarter.
According to the financial results, the profit after tax of LKAB was SEK 3.76 billion ($511 million) in the second quarter of 2010, compared with a loss after tax of SEK 473 million in the second quarter of 2009. Net sales in the second quarter of 2010 increased by 379 percent year on year from SEK 1.72 billion to SEK 8.24 billion ($1.12 billion). Production and deliveries of iron ore products increased during the second quarter by 59 percent and 70 percent year on year to 6.2 million mt and 6.1 million mt respectively.
In the first half of 2010, LKAB's profit after tax was SEK 4.74 billion ($645 million), compared with a loss after tax of SEK 222 million in the second quarter of 2009. Net sales in the first half of 2010 increased by 216 percent year on year from SEK 4.03 billion to SEK 12.72 billion ($1.73 billion). Production and deliveries of iron ore products increased during the first half by 65 percent and 89 percent to 12.4 million mt each.
Regarding the positive appearance of the market, LKAB cautiously commented, "Although global steel production is high, a degree of caution should be exercised with respect to imbalances between the quantities of steel produced and demand from steel consumers."
On the 2010 outlook, the company said, "The market outlook for the full year 2010 remains positive. Major growth is seen in China, which now accounts for about 45 percent of global steel production."
LKAB continues to apply yearly pricing agreements with its customers, despite the quarterly pricing system exercised by the global ore giants.