“Effect of steel and zinc prices on group result neutral in 2018.

The zinc price continued to rise in the first quarter of 2018. After the end of March, it fell sharply, becoming more stable from July 2018 onwards (despite fluctuations that were still noticeable). The development of the zinc price has a direct inverse effect on the figures of the Business Units Surface treatment and Zinc recycling. On the one hand, the downward trend in zinc prices has an impact on the cost of sales as a result of the lower purchase price for zinc; on the other hand, sales are affected by the zinc price. The zinc price on the London Metal Exchange is monitored closely and, unless there are unusual fluctuations in the price, there is a fixed purchasing strategy.

Average price per tonne of zinc in 2018

The steel price rose slightly during the whole of 2018, followed by a slight fall in December. In 2018 the international market continues to be dominated once again by import quotas and whether or not import measures will remain in place in 2019. Global production capacity and import measures have a direct impact on steel prices. A slight increase in the price of steel pushes up costs for the Business Units Steel and steel processing, Grating technology and Expanded metal. In general, these higher cost prices are also reflected in higher sales prices.

Bandwidth of steel price for EU import Plate (8-40mm) in € (source: Metal Bulletin)

In 2018, additional improvements were made to the sales price policy and the monitoring of margins, resulting in a positive contribution to the development of the operating result. The expansion of the production site of the Business Unit Grating technology in Poland has been completed and work is now under way to improve efficiency. Completion of the investment project of the Business Unit Steel and steel processing is expected in 2019.

“Effect of steel and zinc prices on group result neutral in 2018.

The zinc price continued to rise in the first quarter of 2018. After the end of March, it fell sharply, becoming more stable from July 2018 onwards (despite fluctuations that were still noticeable). The development of the zinc price has a direct inverse effect on the figures of the Business Units Surface treatment and Zinc recycling. On the one hand, the downward trend in zinc prices has an impact on the cost of sales as a result of the lower purchase price for zinc; on the other hand, sales are affected by the zinc price. The zinc price on the London Metal Exchange is monitored closely and, unless there are unusual fluctuations in the price, there is a fixed purchasing strategy.

Average price per tonne of zinc in 2018

The steel price rose slightly during the whole of 2018, followed by a slight fall in December. In 2018 the international market continues to be dominated once again by import quotas and whether or not import measures will remain in place in 2019. Global production capacity and import measures have a direct impact on steel prices. A slight increase in the price of steel pushes up costs for the Business Units Steel and steel processing, Grating technology and Expanded metal. In general, these higher cost prices are also reflected in higher sales prices.

Bandwidth of steel price for EU import Plate (8-40mm) in € (source: Metal Bulletin)

In 2018, additional improvements were made to the sales price policy and the monitoring of margins, resulting in a positive contribution to the development of the operating result. The expansion of the production site of the Grating Technology Business Unit in Poland has been completed and work is now under way to improve efficiency. Completion of the investment project of the Steel and Steel Processing Business Unit is expected in 2019.