Market environment and business development
The 2024/25 financial year was characterized by mixed trends in the High Performance Metals Division. Demand remained challenging, particularly in the tool steel segment, while the special materials segment was impacted by weakening activity in the oil and gas sector. In contrast, the aerospace industry maintained its upward trajectory.
Subdued economic development in Europe led to significantly reduced industrial investment in the tool steel product segment and thus to low demand for tool steels. The automotive sector offered no positive momentum; sales and production figures remained weak, and new vehicle models and facelifts were postponed. In this generally declining market, Chinese imports of tool steel increased significantly, further intensifying the competitive situation. Demand in North America was largely satisfactory at the beginning of the 2024/25 financial year but declined noticeably as the year progressed. The presidential election campaign prompted many companies to delay investments, a cautious stance that persisted through year-end. In Brazil, South America, market development was mixed: The first half of the business year saw solid demand for tool steels, but this dropped off in the second half. Rising interest rates slowed investment activity in Brazil, while high Chinese tool steel imports further pressured the market. In contrast, the Chinese market developed positively throughout the year. Strong demand from the local automotive and consumer goods industries supported increased interest in voestalpine’s high-quality tool steels.
The special materials product segment performed satisfactorily overall in the 2024/25 financial year. The aerospace industry continued the positive trend of the previous year, with demand increasing steadily. By contrast, after a good start, the oil and gas industry weakened over the course of the year. Some positive momentum came from the energy machinery segment in the area of power plant turbines.
Value Added Services, the division’s global sales and service network, was affected by weak European demand for tool steel in the 2024/25 reporting year. In addition to the declining market trend for tool steel, North American locations also experienced a slowdown in demand for special materials from the oil and gas sector. By contrast, the Asian Value Added Services sites benefited from robust market situation in China.
Demand for services for tools and tool parts varied. While the weakness of the European automotive industry had a negative impact on the texturing sector, coating services remained stable. Globally, demand for heat treatment services for hardening and finishing tools increased in all markets.
Capacity utilization across the division’s steel plants, which are combined in High Performance Metals Production, varied according to geographical location and product focus.
The newly constructed special steel plant in Kapfenberg, Austria, spent most of the year in ramp-up and commenced regular operation at the end of the reporting period. Weak European demand for tool steel and declining oil and gas sector activity required adjustments to initial plans.
In Sweden, the Uddeholm special steel plant benefited from good demand from Asia and reported satisfactory capacity utilization over the entire reporting period.
The Brazilian Villares special steel plant had solid bookings in the first half of 2024/25 but saw a slight decline in capacity utilization in the second half due to the market slowdown in South America.
The German Buderus Edelstahl plant was sold with the transaction closing on January 31, 2025. This step aligns with the division’s strategy to focus the product portfolio on the high-tech segment of tool steels and special materials while reducing its share of standard products. An additional part of this strategic realignment is a comprehensive reorganization program which already has been started.