Germany-based long steel producer Saarstahl has announced its financial and operational results for 2016, reporting sales revenues of €2.02 billion, decreasing by six percent year on year. Germany continues to be the most significant sales market for Saarstahl, ahead of the EU and third-party countries (NAFTA, Asia, rest of the world).
In 2016, the company registered a negative EBITDA of €25 million, compared to an EBITDA of €138 million in 2015, due to the decrease in its sales revenues and higher expenses.
In the given year, the company’s crude steel production fell by 11.8 percent to 2.45 million mt, while its steel sales volume remained approximately stable at 2.31 million mt, both on year-on-year basis.
According to Saarstahl's statement, due to a decrease in revenues and the continuing tense situation at its subsidiary Saarschmiede, the company recorded a very difficult business year in 2016. Further significant risks are still to be expected in the steel industry's economic situation in the current year. These risks are caused by global overcapacities as well as by steel at dumped prices from China and other countries. In addition, there are the rerouting effects of the flow of goods into the EU due to increased protectionism worldwide as well as high volatility in the market for raw materials, especially for iron ore, coking coal and scrap. This means that there is continued pressure on steel prices and sales margins. On the other hand, thanks to a strong demand, the company commenced the current year with very good levels of capacity utilization at its facilities and a slight upward trend in the demand for steel is to be expected in the product segments of wire rod and steel bar.