Swedish specialty steel producer SSAB has announced that weak market conditions have impacted negatively on its earnings for the fourth quarter of the current year. SSAB expects to report lower earnings for the fourth quarter compared to the previous quarter. This is primarily attributable to lower volumes and falling prices in Europe and North America. In the fourth quarter, the company’s EBITDA is expected to be between SEK 50 million ($5.89 million) and SEK 250 million ($29.48 million) and its operating loss to be between SEK 700 million ($82.55 million) and SEK 900 million ($106.15 million).
Volumes for the fourth quarter are estimated to be lower than in the third quarter of this year and significantly lower than in the fourth quarter of last year. Customers in both Europe and the US have adopted a wait-and-see stance and have chosen to destock against a backdrop of falling prices.
Meanwhile in 2016, in North America and Europe, demand is expected to pick up during the first quarter as a result of low inventories at distributors. Market prices of iron ore have fallen sharply during the fourth quarter and SSAB expects that this will have a positive impact on earnings for the first quarter of 2016. Overall SSAB’s shipment volumes in the first quarter are expected to increase compared with the fourth quarter this year.