European Steel Producers Reported Record Profits in 2007
Notizia pubblicata in rete il 24/08/2007 07.48, tempo medio di
lettura previsto 2 minuti e 47 secondi
LONDON, August 24 /PRNewswire/ -- European steel producers have
reported record profits in 2007, while margins in the US steel
market have fallen. This is according to Integer Research's latest
publication that gathers quarterly and interim financials for 60
leading global steel producers, the Steel Financial Bulletin.
"Global demand and prices for steel remain at historic levels into
2007," says Integer Research Director, Philip Radbourne. "For
example some European companies, SSAB, Salzgitter and voestalpine
have shown record operating and net profit margins in 2007. This is
due to the strong positive global economic trend that has persisted
into 2007."
"However, as can be seen in the Steel Financial Bulletin, it was
not as easy for the Asian and US producers," says Integer Research
analyst, Andrea Valentini. "In the US, the economic momentum has
slowed, triggered by the crisis in the US real estate market. The
softer US economy meant that stocks have built up, particularly of
flat steel sheet. Consequently margins for companies like Nucor and
AK Steel have fallen. Margins had also been squeezed by imports and
prices; however imports have recently dropped, leading to a
healthier business environment. This has resulted in a stronger
performance in the US steel market in Q2 2007."
Radbourne continues, "In China the cost pressure among some
players, and pressure on prices, hit margins for many of the steel
producers early in 2007. This was despite the continued strong
demand. The only companies that have been able to sustain their
profitability are those producing quality flat products, such as
Angang, Tangshan and Shougang. They have been able to sustain their
profit margins because strong economic performance in China. This
has underpinned demand for flat steel products used in a range of
consumer goods."
In Japan, Nippon Steel Corp. and JFE Holdings Inc have both been
able to post strong quarterly profits margins, helped by higher
steel prices. Nippon Steel, the world's second largest steel
producer has benefitted from strong worldwide sales of Japanese
cars, helping its pre-tax profit increase by 21% year-on-year to
Yen148.7 billion (US$1.26 billion). JFE, sold nearly half its steel
products to customers in South Korea, Thailand and China However,
both Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., which rely
less on booming car sheet production than the bigger two rivals
have seen their margins squeezed over the last few months.
"South Korea's POSCO announced a 55% increase in its quarterly net
profits in Q2 2007, as it saw rising demand from car companies and
shipbuilders," says Radbourne. "Arcelor Mittal also reported a
strong performance. It saw a 50% increase year-on-year in net
profits, based on its pro-forma 2006 results. However, it will be
interesting to see how Arcelor Mittal performs, once we are able to
look at the company on a like-for-like basis through next year. It
will also be interesting to see, in future editions of the
Financial Bulletin, whether the company has been able to gain from
consolidation."
Integer Research: Kingsley Maunder +44-207-503-1265
