Befesa reports flat EAF dust market in 2023

Luxembourg-based Befesa S.A. reports its total revenue increased by 4 percent in 2023 compared with the prior year, but its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreased by 15 percent compared with 2022.

The company, whose operations are focused in part on the recycling of furnace dust generated by electric arc furnace (EAF) steel mills in the United States and Europe, attributes its 2023 revenue increase to the contribution from the U.S. zinc refining operation.

“With respect to volumes, the throughput of [EAF] steel dust remained flat at 1,195,000 tons in 2023, with an average capacity utilization of around 70 percent and a mixed performance across Befesa’s markets,” the company says.

Befesa says in Europe, EAF steel dust treated volumes stayed at solid levels, despite challenging steel production levels, while in China, volumes were impacted by the real estate crisis.

The company says its zinc refining plant in North Carolina ran at high utilization levels last year with a focus on gradually improving profitability.

Its recycled volumes of aluminum salt slags increased by 12 percent to 361,000 tons in 2023, with an average capacity utilization of around 77 percent. Secondary aluminum alloys volumes increased by 5 percent to 168,00 in 2023, with an average capacity utilization of around 82 percent.

Befesa Executive Board Chair Javier Molina says last year was a "perfect storm" as the company faced a confluence of adverse external factors, ranging from high zinc treatment charges (TCs) and low zinc prices to all-time high coke prices.

"Despite these challenges, our solid EBITDA levels and cash flow demonstrated the resilience of our business model," he says.

“As we enter 2024, we anticipate favorable tailwinds resulting from the reversal of many of the previous year’s headwinds, such as coke price normalization, improved zinc TC and London Metal Exchange [LME] price dynamics, enhanced zinc hedges, growth in our U.S. operations, and a positive contribution from China. Our commitment to rigorously executing our growth projects positions Befesa for robust performance in the years ahead.”

The U.S. growth Molina refers to involves the refurbishment of the company’s plant in Palmerton, Pennsylvania. Befesa says that upgrade remains on track and that progress will continue this year, enabling it to improve profitability levels and to capture the anticipated increase in EAF steel dust volumes in the U.S. market for 2025.