Steel bar, rod demand to rise in 2018 amid buoyant end-use sectors, Saarstahl says

Demand for steel bar and rod will rise in 2018 due to increased consumption from key end-users, German long steel producer Saarstahl said on Tuesday March 20.

“In the important customer segments for Saarstahl - the automotive and mechanical engineering industries - continued high demand is emerging for 2018,” the company said.

“Against this backdrop, it can be assumed that there will be a constant rise in demand for... wire rod and bar steel,” Saarstahl said.

The mechanical engineering sector forecasts an increase in order volumes from the domestic and export markets during the year, while the automotive industry anticipates a further increase in the global production of passenger vehicles and heavy duty vehicles in 2018, according to Saarstahl.

German new car sales were 261,749 units in February 2018, up by 7.45% year-on-year.

The Saarstahl Group’s crude steel output in 2017 rose by 13.63% to 2.785 million tonnes, up from 2.451 million tonnes the previous year.

Saarstahl’s combined wire rod and bar steel sales increased by 9.56% to 2.532 million tonnes in 2017, compared with 2.312 million tonnes in 2016.

Metal Bulletin’s weekly price assessment for domestic mesh-quality wire rod in Northern Europe narrowed upward by €5 per tonne to €550-560 ($677-689) per tonne delivered on March 14.

Saarstahl Group’s earnings before interest, taxes, depreciation and amortization (Ebitda) for 2017 reached €230 million, compared with a negative Ebitda of €26 million in 2016.

Section 232 concerns
Despite the strong financial results and favorable outlook, Saarstahl underlined the risks posed by the Section 232 steel tariffs of 25% which will be applied by the United States from Friday March 23.

“Due to increasing economic protectionism worldwide, considerable deflective [trade] flows onto the liberal EU market are to be expected and this could destabilize the sensitive price structure,” the company said.

Despite that, “subject to possible effects of the import restrictions by the US, the group anticipates that [2018] sales volumes will remain [at] an unchanged high level,” Saarstahl said.

The US imported 1.49 million tonnes of steel from Germany in 2017, according to US Commerce Department statistics.

Showdown talks between the EU and the US over possible exemptions from the tariffs will take place before the duties are imposed on March 23, Peter Altmaier, Germany’s economy minister, has said.

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