In the first quarter of 2014/15, the Special Steel Division’s market environment largely continued to see the same trend as in the last quarter of the previous year, i.e., continuing challenging market environment in Europe, subdued growth in Brazil, and a mostly satisfactory development in both North America and Asia.
The cautious revival of demand that appeared toward the end of the last business year—after weak demand in the summer and fall months—was driven in the individual sectors primarily by increased deliveries to the automotive industry. However, there were no positive impulses to be seen from the power plant and energy engineering industries, which continue to linger in a deep crisis, especially in Europe. Generally, the mechanical engineering sector did not live up to expectations at the beginning of the year, but the oil and natural gas exploration sectors and the aviation industry showed a solid development as anticipated.
Against this backdrop, the economic circumstances in the High Performance Metals business segment were stable with regard to the tool steel product segment. In the special materials segment, the division has profited from continuing exploration activity by the oil and natural gas industries and the stable development in the aviation sector. Due to the lack of investment in the power plant sector, there was no recovery in the order situation for open-die forgings, and there is no sign that this will change during the remainder of the business year.
The Value-Added Services business segment profited increasingly from investments undertaken in recent years in coating and heat treatment services and in mechanical processing. The comprehensive package of high-quality steel combined with sophisticated services that the division offers is ensuring its position as a global premium supplier. The run-up phase at new coating centers in Canada and China (see chapter “Investments”) and the integration of two new sales companies in India is progressing on schedule.