Austrian steelmaker Voestalpine AG‘s foreign expansion plans, focused on the US automotive market, will not be changed by the weak oil price or the euro, its chief executive told Reuters on Tuesday.
Voestalpine, which sells steel and steel-based products to the automotive, railway and engineering industries, among others, has targeted the energy sector as one of its key growth areas and until recently had benefited from the US shale boom.
However, a plunge in oil prices since summer 2014 has seen energy firms slash investment plans, hitting their suppliers.
“The oil price is an interesting thing but … experience tells us it tends to be over-interpreted,” Wolfgang Eder told journalists in remarks embargoed for Tuesday. “We expect that things will already turn around again in autumn.”
He said Voestalpine would be able to sell any surplus steel originally destined for the US oil and gas market elsewhere.
Voestalpine plans to invest about 250 million euros ($283 million) in the United States in each of the next two years, mainly in its new sponge-iron plant in Texas, and about 50-100 million euros per year thereafter, Eder said. The expansion is an important part of Voestalpine’s plan to internationalise its business and reduce its dependence on the Austrian market and expensive European energy to power its furnaces.
On Tuesday, February 10, the day’s biggest mover was the price of Chinese HRC, which saw a 2.3% decline to CNY 2,510 ($401.71) per metric ton. This was the first move after three changeless days. The price of Chinese coking coal saw essentially no change for the fifth day in a row, remaining around CNY 1,080 ($172.85) per metric ton. Chinese slab saw little change in its price on Tuesday at CNY 2,430 ($388.91) per metric ton. The price of iron ore 58% fines from India hit a high price of CNY 840.00 ($134.44) and a low price of CNY 840.00 ($134.44) per dry metric ton.
The cash price of steel billet saw little movement on the LME at $500.00 per metric ton. The steel billet 3-month price held steady on the LME at $480.00 per metric ton.
The US HRC futures contract spot price fell 0.4% to a 30-day low of $538.00 per short ton yesterday. The US HRC futures contract 3-month price held steady around $545.00 per short ton.