In the first quarter of the business year 2014/15, crude steel production worldwide continued to grow with a 3.5% year-to-year increase. At +4.7%, the largest growth rates were again in Asia, although even the saturated economies in North America (+2.2%) and Europe (+1.8%) increased their production quantities.
The reason for this development in Europe was an increase in demand from practically all industry sectors that require steel, especially the automotive and construction industries. The European steel industry reacted to this situation by promptly increasing production quantities, without, however, even beginning to eliminate the pressing problem of overcapacity. On the contrary, by taking this step, it a priori thwarted any opportunity to improve its profitability, which has been insufficient for some years.
In the past business quarter, the voestalpine Steel Division maintained the comparatively good profitability level of the first three months of the previous year. It profited particularly from the previously mentioned positive development of the European automotive industry, but also from the revival of the energy market (heavy plate for pipelines), which is showing a recovery trend after the extremely difficult business year 2013/14, as major pipeline projects were contracted (“South-Stream I” in Europe/Russia, “Rota 3” in Brazil).
Building on an already solid level, the European automobile manufacturers recorded rising production figures over the entire quarter. This time, this was not based solely on export successes—as in the recent past—but also on increasing demand in Europe.
The other important market segments for the Steel Division, the white goods and consumer goods industries as well as the mechanical engineering sector, are performing at a stable and solid level. The construction industry, which is of secondary importance for the voestalpine Group, was able to make gains since the beginning of the calendar year—in part due to favorable weather conditions—however, it continues to linger at a very low level.
Overall, the division’s level of orders is higher than average and the already outstanding capacity utilization is ensured for the entire second half of the calendar year.