Market situation and outlook
According to the World Steel Association, global crude steel production for 2018 amounted to 1,790 (1,712) million tonnes, up 4.5% compared with 2017. Chinese steel production increased by just under 7%, compared with 2017. Steel production in the EU-28 was unchanged, whereas production in North America rose by just above 4% during 2018.
In North America, demand was good in 2018, especially during the second half of the year. Most segments showed good or growing demand during the year. The steel import tariffs introduced during the first half of 2018 have boosted demand for locally-produced material. Around 90% of the volumes SSAB sells in the USA are produced locally, with the remainder exported from Europe by SSAB Special Steels and SSAB Europe. To date, a minor share of these volumes have been exempted from the tariffs. Stock levels at distributors in North America are considered to be in balance, or somewhat low.
In Europe, demand was stable during the year, albeit with somewhat weaker development during the fourth quarter, driven primarily by the European automotive industry. There was also a normal seasonal slowdown towards the end of the year. Stock levels at distributors are considered to be in balance.
Demand for high-strength steels during 2018 was stable and at a relatively high level.
In North America, market prices for heavy plate rose somewhat further during the quarter. Compared with the full year 2017, prices for heavy plate have risen sharply. In Europe, market prices for strip and heavy plate rose initially during 2018, then decreased during the second half of the year, before leveling off towards the end of the fourth quarter. In China, market prices for both strip and heavy plate decreased during the fourth quarter and were somewhat lower also for the year as a whole.
In North America, demand for heavy plate is estimated to remain strong during the first quarter of 2019. In Europe, demand is expected to be fairly stable. Global demand for high-strength steels is expected to remain strong during the first quarter of 2019.
For SSAB Americas, shipments are expected to be higher during the first quarter of 2019 compared with the fourth quarter of 2018, when a major maintenance outage was completed. Shipments for SSAB Europe are expected to be higher in the first quarter compared with the fourth quarter, when maintenance outages were completed in parts of the operation. Shipments for SSAB Special Steels are expected to increase during the first quarter, primarily following the planned maintenance outage in Oxelösund during the fourth quarter.
Prices realized by SSAB Special Steels during the first quarter are expected to be stable and somewhat higher for SSAB Americas, compared to the fourth quarter of 2018. Prices realized by SSAB Europe during the first quarter are expected to be lower.