By Marta Frackowiak (Reuters) -Swedish steelmaker SSAB’s earnings grew more than expected in the third quarter, helped by a so far limited tariff impact and despite a cautious mood in the European steel market pressured by cheap imports from Asia. Operating earnings rose 50% to 1.87 billion Swedish crowns ($198.61 million) in the July-September period, […]
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SSAB beats earnings forecast, calls for end to cheap Asian steel imports
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By Marta Frackowiak
(Reuters) -Swedish steelmaker SSAB’s earnings grew more than expected in the third quarter, helped by a so far limited tariff impact and despite a cautious mood in the European steel market pressured by cheap imports from Asia.
Operating earnings rose 50% to 1.87 billion Swedish crowns ($198.61 million) in the July-September period, while analysts were expecting 1.75 billion on average, a poll provided by SSAB showed.
Local production accounts for most of SSAB’s sales in the United States, which limits the impact from U.S. President Donald Trump’s import duties, CEO Johnny Sjostrom said in a statement.
“However, certain special products, mainly high-strength steel for the automotive industry, are exported from the Nordics,” he added.
Steel and aluminium were among the first targets of Trump’s trade measures. In March, a 25% tariff was imposed on most imports of these metals, before being increased to 50% for most countries in June.
Europe’s steel industry, meanwhile, remains under pressure from a combination of soaring energy costs and growing competition from low-cost exports from Asia, and especially China.
“I think it’s extremely necessary that we stop the extremely cheap imports from Asia,” Sjostrom told Reuters.
Earlier in October, the European Commission proposed cutting steel import quotas in half and imposing a 50% duty on shipments that exceed those limits in a bid to preserve viable steelmaking in the European Union.
“When we have countries not acting according to the free or fair trade rules, then I think it’s necessary for Europe to take a stand, otherwise the production capacity in Europe will disappear,” Sjostrom said.
Production capacity across Europe has fallen by roughly 50 million metric tonnes over the last 10-15 years, he added.
SSAB said fourth-quarter outlook was “uncertain”, with European market normally affected by a seasonal slowdown towards the end of the year. It also plans to do maintenance work in both North America and Europe.
($1 = 9.4155 Swedish crowns)
(Reporting by Marta Frąckowiak in Gdańsk; Editing by Milla Nissi-Prussak)