After a strong performance in the first half of the year, the mood in the second half of the business year was characterized by the spreading of uncertainty from the financial markets to the real economy, driven by the sovereign debt crisis in Europe and certain market weaknesses in some of the threshold countries. As a result, the market environment weakened in the third quarter, although it recovered toward the end of the business year. Overall, the more cautious and volatile order patterns in important customer industries led to a slightly lower level of incoming orders compared to the previous year.
All in all, the Special Steel Division experienced a solid level of demand in the business year, coming primarily from the automobile, mechanical engineering, oil and gas exploration, consumer goods, and aviation industries, while the trend in the energy equipment industry was very subdued over the entire period. Due to market development that was satisfactory overall, capacity in the divisional production companies was fully utilized, with only occasional exceptions during the third quarter of the business year.
Viewed regionally, demand for special steel and special steel products was consistently stable in practically all of our core markets; in Germany, our most important individual market, we even experienced demand that was quite robust. A notable fact is that in Asia, business in some customer segments was restrained, while, at the same time, the USA exceeded our original expectations with substantially more dynamic order patterns than anticipated.
Looking at the individual product segments of the Special Steel Division, special steels, in particular, anti-magnetic drill collars for oil and gas exploration, but also special alloys, valve steel, and special structural steel made the most significant gains compared to the previous year. Over long stretches of the year, demand for tool steel was slightly down, with demand increasing only toward the end of the business year. In the high-speed steel segment, demand was high during the first nine months of the business year, however, in the last quarter, it trended downward.
