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Market situation and outlook

Market situation and outlook

The market

According to the World Steel Association, global crude steel production for the first three months of 2019 amounted to 288 (277) million tonnes, up 4% compared with the same period in 2018. Chinese steel production increased by 9% and steel production in North America rose by 4%, whereas production in the EU-28 decreased by just under 4% compared with the same period in 2018.

In North America, demand for heavy plate was generally strong during the first quarter. However, demand from distributors was cautious and their stocks are considered to be in balance or somewhat high. In Europe, demand was fairly stable in many segments during the quarter, with the exception of weaker demand from the automotive industry and a continued cautious sentiment from distributors. Stock levels at distributors are considered to be in balance. Global demand for high-strength steels remained good during the quarter.

In North America, market prices for heavy plate decreased somewhat during the first quarter, albeit from a high level. In Europe, market prices for strip fell during the quarter, whereas those for heavy plate increased somewhat. In China, market prices for both strip and heavy plate rose during the first quarter.


Market outlook

In North America, demand for heavy plate is estimated to continue to be good during the second quarter of 2019. In Europe, demand is expected to be somewhat weaker. Global demand for high-strength steels is expected to remain strong during the second quarter of 2019.

For SSAB Americas, shipments are expected to be at about the same level during the second quarter of 2019 as for the first quarter. Shipments for SSAB Europe are expected to increase during the second quarter compared with the first quarter, when production was restricted in one of the blast furnaces. Shipments for SSAB Special Steels are expected to increase somewhat during the second quarter.

Prices realized by SSAB Special Steels during the second quarter of 2019 are expected to be stable compared with the first quarter. Prices realized by SSAB Europe and SSAB Americas are expected to be somewhat lower during the second quarter. Higher raw material costs, primarily of iron ore, will have a negative impact on margins during the second quarter, mainly for SSAB Europe, but also for SSAB Special Steels.