Acerinox profitable in 2022, but reports Q4 slowdown

Madrid-based stainless steel and alloys producer Acerinox has reported what it calls “the best results in its history in 2022,” despite what it also calls “the complexity of the market, geopolitical uncertainty and high energy costs, especially in Europe.”

For the year, Acerinox says its 2022 melt shop production of about 2.19 million metric tons was down by 16 percent compared with 2021. However, the firm’s revenue of nearly 8.7 billion euros ($9.26 billion)  represented a 30 percent increase compared with 2021.

On the operations front, Acerinox says its accident rate (measured by lost time injury frequency rate, or LTIFR) fell by 28 percent in 2022 compared with the prior year.

In the notes accompanying its results, Acerinox affirms its intention to invest $244 million in the North American Stainless (NAS) mill in Ghent, Kentucky.

“NAS will have a new cold-rolling mill, the modernization of its annealing and pickling lines and the expansion of the melting shop, including auxiliary equipment to improve the logistics and productivity of the melting shop,” states the company.

In his comments accompanying the results, Acerinox CEO Bernardo Velázquez writes in part, “The North American market, which is our main market, continues to perform well.”

Overall, however, the company says the fourth quarter brought with it a slowdown in activity, much as it did for Luxembourg-based Aperam, its stainless steelmaking competitor.

In the fourth quarter, melt shop production at Acerinox dropped by 37 percent compared with the fourth quarter of 2021 and was down by 21 percent compared with the prior quarter. Activity “declined considerably” during the fourth quarter, says Acerinox, citing “low apparent demand, the inventory adjustment process and the end-of-year seasonal correction.”

Surveying the landscape in 2023, Velázquez writes, “In the stainless steel sector, the dynamics of the second half of the year 2022 continue, with apparent consumption improving, although still slow. We expect the inventory adjustment process by retailers to be completed during the second quarter and thereafter to recover normal activity.”

On the positive side, the CEO cites the strong performance of the North American market and adds, “The market for high-performance alloys remains strong, and the order backlog for the first half of the year remains at high levels.”

Velázquez concludes, “For these reasons, we expect earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter of 2023 to be clearly better than in the fourth quarter of 2022.”