In the business year 2021/22, the market environment of the High Performance Metals Division improved significantly year over year. The special materials product segment saw the most dramatic upward trend: As it serves the oil & natural gas industry as well as the aerospace industry, this segment focuses on precisely those two industrial sectors that were massively affected by the COVID-19 pandemic and then profited the most from the subsequent recovery. Thanks to its two main customer segments, the automotive and the consumer goods industries, the tool steel product segment delivered very good performance as well. It succeeded in translating the sharp increases in raw material costs for scrap and alloying elements into higher customer prices based on the alloy surcharge mechanism. Developments in the alloy segment finally turned volatile in the reporting period’s fourth quarter. In particular, the price of nickel, the most important input material, started to move erratically in early March 2022 as a direct consequence of the Ukraine war. The increases in the cost of energy had already started to make themselves felt in the Northern fall of 2021 when the prices of electricity and natural gas jumped significantly in Central Europe. Growing uncertainty as to natural gas supplies in Europe due to the onset of the Ukraine war led to even greater price fluctuations in the business year’s final quarter. Hence special steel plants in both Germany and Austria were faced with sharply higher energy costs than those in Sweden and Brazil. Compared with the situation in the European Single Market, therefore, it was much more difficult to pass on the dramatically rising costs of electricity and natural gas to customers in regions other than Europe, because competitors in those areas did not have to contend with comparable price increases.
Tool steel
The automotive industry’s economic environment was good during the business year 2021/22. The greater range of car model variants—from vehicles powered by conventional combustion engines to those engineered for e-mobility—had a positive impact on tool steel demand. The industry’s recovery was particularly pronounced in Europe. Yet North and South America as well as China also saw strong growth in the demand for tool steel used in the automotive industry. Market conditions in the consumer goods industry, the second-largest driver of tool steel demand, were very good also. Consumption in Asia, which is very important to the High Performance Metals Division, benefited from the general rebound of the relevant economies. And tool steel orders for Brazil’s general mechanical engineering sector were especially strong.
Special materials
The High Performance Metals Division’s special materials product segment benefited from a significant upward trend in the business year 2021/22. Continuously rising oil prices, which approached an all-time high in early March 2022 due to the Ukraine war, stimulated investments in the oil and natural gas sector. Activities in this segment had already bottomed out at the start of the reporting period. The number of new projects in the offshore segment, where the materials used must satisfy particular requirements, also began to grow. Thanks to its high-quality product range, the division benefited from the momentum across the board. Increasingly, new applications such as high performance materials used in carbon capture and geothermal technology are the result of manifold transformations in industries with large greenhouse gas (GHG) emissions. Considered by region, the division substantially boosted its business volume in North America. While the Section 232 tariffs of 25% on steel imports into the U.S., which were enacted in 2018, still had a negative effect, a new treaty that took effect on January 1, 2022, offers some relief. Particular quotas of steel imports—staggered according to product category and country of origin—are now eligible for duty-free entry into the United States from Europe.
Following its meltdown in the previous year owing to the COVID-19 pandemic, the aerospace industry saw a continual upward trend throughout the business year 2021/22. In part, regional air traffic already returned to pre-crisis levels, thus steadily pushing up demand for short-haul aircraft. Nonetheless, it will take at least a few more years for overseas air traffic to reach pre-pandemic levels, with the result that demand for wide-body aircraft will develop after a considerable delay. In Europe, the value chains stabilized over the reporting period thanks to increased construction of short and medium-haul aircraft. In the U.S., orders from the aerospace industry also began to grow.
High performance metals production
Capacity utilization in the High Performance Metals Production segment rose substantially in the business year 2021/22 thanks to rising demand. The segment processed its large order volume in due time despite some of the bottlenecks resulting from the disruptions in international supply chains. However, extremely high energy costs at voestalpine Edelstahl Deutschland in Wetzlar, Germany, led to a few production shutdowns at the close of the reporting period. At voestalpine BÖHLER Edelstahl, the construction of the new special steel plant in Kapfenberg, Austria, continued apace. The plant’s commissioning is still slated for the Northern summer of 2022.
Additive manufacturing (3d Printing)
In the business year ended, the High Performance Metals Division continued to expand its strategic, cutting-edge field of Additive Manufacturing. Currently, it operates two research facilities along with two production plants in Austria and Sweden for manufacturing the powder. It also maintains seven Value Added Services facilities in Europe, North America, and Asia for assembling components that are manufactured using additive processes. Linking local additive manufacturing centers with the company’s own production of powder serves to secure its technology leadership across the entire process chain.
Value added services
In recent years, the division has steadily worked to expand its strategy of distinguishing itself from the competition through a broad services portfolio. Its global Value Added Services business segment had a substantially stabilizing effect on earnings despite the massive market distortions arising from the COVID-19 pandemic a year earlier. In the business year 2021/22, the segment’s processing and sales centers delivered excellent performance yet again, thus making a crucial contribution to the solid performance of the High Performance Metals Division on the whole. High demand for tool steel and for services such as mechanical processing, heat treatments, and surface coatings largely accounted for this development.
