SSAB expects higher steel supplies in first quarter despite sluggish demand

Swedish steelmaker SSAB, which specializes in the production of steel strip, plate and pipe products, expects to increase deliveries during the first quarter of this year, despite subdued demand from major steel consumers.
The forecast was made in the company's financial report for the fourth quarter and full year 2023, published on Wednesday, January 31.

In Europe, only one of the seven industrial sectors that are major steel consumers has a "strong" demand outlook for the first quarter, SSAB said. This is the energy sector due to the increased demand for renewable energy production.

However, the outlook for the construction sector in the Northern region remained grim.

The company rated the outlook for the remaining five industry sectors—heavy transportation, automotive, construction equipment, material handling and service centers—as neutral.

SSAB added that there were some signs of a slowdown in demand from the automotive and heavy freight sectors in Europe, despite positive signals from the railcar and ship sectors in the US.

Indeed, some steel service centers in northern Europe said their flat-rolled sales to the automotive sector were about 10-15% less than planned in January.

Regarding service centers, SSAB said there is some potential for restocking in the first three months of 2024.

SSAB expected the company's two divisions in Europe and the United States to carry out 5-10% more deliveries in the first quarter of the year compared to the last three months of 2023. SSAB Special Steels supplies were expected to be even higher. will increase by more than 10%.

The company noted that the expected improvements at SSAB Europe and SSAB Special Steels are due to seasonal factors, in particular inventory replenishment. Indeed, replenishment of inventories in January and reduced supply in the European market due to production cuts supported the rise in flat steel prices.

During January, prices for hot rolled coils in Northern Europe increased steadily. The Fastmarkets domestic daily hot rolled steel coil index, excluding Northern Europe, averaged €731.73 ($792.22) per tonne for the month, the highest since May 2023.

However, market sources told Fastmarkets that the current price rise was entirely supply driven as many blast furnaces in Europe had not resumed operations. They were unsure whether the upward trend would continue into the second quarter of 2024.

Sales of green steel are on the rise.
SSAB hopes that demand for environmentally friendly steel will continue to grow steadily around the world.

“In 2023, interest in zero-carbon products increased and we delivered more than 50,000 tonnes of SSAB Zero,” the company added. SSAB described the product as “the lowest emission steel product on the market in the world.”

SSAB said its SSAB Zero products are fossil fuel-free and CO2 Scope 1 and Scope 2 compliant.

According to Fastmarkets sources, demand for green steel in Europe has been very patchy and largely limited to end consumers. Recently, only limited quantities have been sold in the market, with the automotive industry considered the main consumer of such products.

Fastmarkets' weekly assessment of domestic flat steel, differential to the HRC index, excluding Northern Europe, stood at €150-250/t on Thursday, unchanged from mid-December 2023.