Sweden’s SSAB posts larger-than-expected profit as steel prices soar

STOCKHOLM (Reuters) – Swedish steelmaker SSAB reported on Tuesday a bigger-than-expected jump in first-quarter earnings on the back of strong steel prices, but said the outlook for demand and shipments was beset by some uncertainty.

The specialized high-strength steels producer rode to a record profit last year on the back of soaring steel prices and strong output at its production plants in Sweden, Finland and the United States, a development that carried into 2022.

The niche steelmaker said operating profit, excluding extraordinary items, rose to 8.38 billion Swedish crowns ($864 million) from a year-ago 1.99 billion to surpass an analysts’ estimate of 6.66 billion from Refinitiv.

The company said in a statement that the first quarter had seen an “exceptional” rise in demand due to constraints on steel supply following Russia’s invasion of Ukraine, which Moscow calls a “special military operation”.

“Demand for steel during the second quarter of 2022 is expected to normalize and, hence, be on a somewhat lower level than in the first quarter,” the company said.

“There remain uncertainties with a shortage of components as well as bottlenecks in logistics chains.”