In the first half of 2014/15, crude steel production in Europe grew by a little over 1% compared to the same period of the previous year. Towards the end of the reporting period, the trend was reversed and in September 2014, for the first time in this business year, less crude steel was produced in Europe than in the same month of the previous year. With the exception of scrap, the downward trend in prices for raw materials relevant to blast furnace-based crude steel production continued in the first half of 2014/15. In September 2014, the price for iron ore fell to USD 78 per ton, its lowest level since the summer of 2009, due largely to a dramatic increase in capacity undertaken by mine operators, who had apparently assumed that global steel production would grow more significantly at the time they made their investment decisions some years ago. Against this backdrop, prices for steel products in Europe also trended downward, although the price level on the spot market did stabilize at a low level in the course of the second quarter of 2014/15.
The automobile industry was once again the economic backbone for full capacity utilization in the Steel Division during the entire first half of 2014/15. The development in the mechanical engineering industry experienced a declining level of incoming orders, not least due to weaker exports by European machinery manufacturers to Russia. Demand in the white goods and consumer goods sectors remained at a stable level. There was little momentum as far as demand is concerned from the electrical industries, however, in part because electro-mobility has not fulfilled expectations thus far. The uptrend in the construction industry, which had made itself felt since the beginning of the 2014 calendar year, leveled off over the summer months; currently, orders are coming in at a sluggish pace. The tough conditions that were prevalent in the market environment of the oil and natural gas transport segment (pipeline construction) in the business year 2013/14 are currently being rolled back. After the South Stream I (Russia) project was awarded in early 2014, two additional pipeline projects, Rota 3 (Brazil) and South Stream II, were contracted during the summer months. This means that solid capacity utilization has been ensured for the Heavy Plate business segment for the entire business year 2014/15.