The segment recorded an operating loss of €340 million which includes restructuring costs but excludes interest and tax costs. This follows a loss of €499 million in the second half of 2011 reflecting the continued difficult operating environment in Europe.
Compared to the same period of 2011, the segment’s crude steel production fell 8% from 15,501 Mt to 14,325 Mt as output was adjusted to weak demand levels.
Steel shipments for Q2 2012 fell to 6,771 Mt, a decrease of 9.2% as compared to 7,461 Mt for 1Q 2012. This was due to lower demand in Europe, following the end of restocking, as well as lower exports.
Sales were €5,634 million for 2Q 2012, a decrease of 4.3% as compared to €5,887 million for 1Q 2012. Sales decreased primarily due to lower steel shipment volumes offset in part by higher average steel selling prices (+4.8%).
Capital expenditure in the segment in the first half of 2012 was €375 million, slightly higher than the €356 million spent in the same period of the previous year.
Steel demand in the developed world has been impacted globally as a result of the severe problems experienced in the economy since the onset of the financial crisis at the end of 2008. Developed world demand remains far below its peak, at only 410 million tonnes in 2011 compared with 492 million tonnes in 2007. The situation is most severe in Europe, which has been further exacerbated by the as yet unresolved euro crisis and the recovery is limited by weak consumer demand, government expenditure cuts and slow rebound in investment growth.