Spanish steelmaker Acerinox reported net profit halved in the third quarter of 2023, pointing to a contraction in the global steel market, which it said was unlikely to recover until 2024.
Net profit in the period from July to September fell 51% from a year earlier to 70 million euros ($74 million).
Weaker demand in Europe this year due to economic uncertainty and higher interest rates has put pressure on earnings at steel companies hit record levels in 2021 and 2022.
Acerinox said the market downturn likely meant its earnings before interest, taxes, depreciation and amortization (EBITDA) would be in the fourth quarter will be slightly lower than the 146 million euros recorded in the third quarter.
With the global economy slowing and putting particular pressure on production, steel supply has outstripped demand in recent months, with prices falling and customers reducing inventories .
Apparent consumption in Europe fell 26% in the year to September, and the US saw a similar trend through August, the company said.
European Steel Association Eurofer on Monday lowered steel market forecast, stating that demand in The European Union will fall 5.3% this year.
The U.S. market, which accounts for half of Acerinox's revenue, weakened in the third quarter, although recovery expectations are slightly better than in Europe.
Steel prices in the US are currently higher due to tighter import controls compared to Europe, and because the Federal Reserve began raising interest rates before the European Central Bank.
