Aperam, the stainless-steel producer spun off by ArcelorMittal, said second-quarter profit slumped 97 percent as steel sales declined, and forecast earnings will “trough” in the third quarter.
Net income dropped to $2 million in the period from $66 million a year earlier, the Luxembourg-based company said today in a statement. Earnings before interest, tax, depreciation and amortization were $102 million, missing the $111.3 million average estimate of six analysts surveyed by Bloomberg.
Stainless-steel customers adopted “wait-and-see behavior, which had a negative impact on pricing,” Aperam said. While a seasonal slowdown will see Ebitda “trough” in the third quarter, Aperam said it has “started to see signs of market stabilization, which gives us confidence for the end of the year.”
European stainless-steel producers face overcapacity and higher raw-material costs at the same time as prices of the finished metal decline. European stainless steel averaged 1,155 euros a ton in the quarter, 7.6 percent lower than a year earlier. Outokumpu Oyj, a Finnish producer of the alloy, last week forecast a decline in third-quarter profit as demand and prices slump.
Aperam’s second-quarter sales rose 13 percent to $1.71 billion.