On March 19, Finnish steelmaker Rautaruukki (Ruukki) stated that it expects to post clearly negative financial pre-tax results for the first quarter of 2009 due to the weak demand for steel products.
In its statement, Rautaruukki said, "Weaker than expected earnings performance is attributable to continued extremely low demand for steel products. During the first months of the year, demand has also fallen as customers reduce high stockpiles, which in turn has also resulted in weaker than expected price development for steel products."
According to Rautaruukki, prices of the main raw materials used in steel production are still high, even though they are expected to fall significantly towards the end of the year. The low capacity utilization rate in steel production considerably increases the fixed costs per unit of steel produced. This in turn has weakened the profitability of the company's steel business. The prevailing market conditions have not yet given reason to re-start one of the two blast furnaces shut down temporarily in early December last year at Rautaruukki's Raahe Steel Works in Finland.
Rautaruukki's results for the first quarter of 2009 will be disclosed on 23 April 2009, when the company will also review its near-term outlook. Rautaruukki's net profit for the fourth quarter of 2008 was €74 million, amounting to €548 million for the whole year.