In the first half of 2014/15, the economic environment of the Special Steel Division improved slightly compared to the previous year. The summer months saw the customary seasonal effects, which, however, were considerably less pronounced than in the previous year, particularly in North America. Most recently, price pressure has also abated somewhat because the competition’s capacity utilization has improved slightly. Rising prices for crucial alloys, such as nickel and chrome, put a stop to the common customer practice of reducing orders to an absolute minimum in expectation of falling prices.
Viewed regionally, the European core markets have not shown any signs of a more broad-based recovery thus far. Particularly in Germany, the most important market for the Special Steel Division, orders from customers remained very volatile, while in Austria, market sentiment recently became somewhat more optimistic. In North America, performance in the tool steel and special materials segments showed a stabilizing trend at a solid level over the summer months; development in the USA was substantially more positive than in Canada. In South America, business investment was cautious, especially in the oil and natural gas exploration sector in Brazil. Nevertheless, the Special Steel Division was able to contract significant orders for complex components for the oil and natural gas industries. Despite the ongoing currency devaluation, there have been no signs of a sustainable Brazilian economic recovery. The economic development in Asia and particularly in China was within the expected parameters, i.e., at a satisfactory level overall.
In the High Performance Metals business segment, customers of the tool steel and high-speed steel segments had low inventories, which had a positive effect on business development in the first half of 2014/15, with premium products experiencing increased demand. Furthermore, the continuing positive order situation in the automotive and consumer goods industries contributed to the satisfactory capacity utilization of this business segment. In contrast, the mechanical engineering segment did not fulfill the economic expectations held in the early part of the year. The situation of the energy engineering industry is unchanged, in other words, it continues to stagnate at a low level. The special materials segment, which has been profiting primarily from a positive level of demand from the aviation industry and oil and natural gas exploration, continues to experience strong growth. The commercial vehicle industry demonstrated a stabilization of demand at a moderate level.