The Management Board of voestalpine AG announced the need for a non-recurring write off at voestalpine Texas during the current business year 2020/21 due to impairment of assets. The reevaluation is primarily a consequence of the COVID-19 pandemic and necessary adjustments to this company’s expected mid-term results. The direct reduction plant which went into full scale operation in 2017 produces around two million tons of sponge iron annually, a sophisticated pre-material used in steel production by customers around the world. Since 2019, the HBI plant has been particularly severely affected by the high prices for iron ore, and low prices for scrap. The global iron ore price is primarily influenced by growing demand from China, while in the rest of the world the scrap price remains low. This decoupling is leading to price ratios for iron ore and scrap of a scale hitherto unknown, which in turn is impacting HBI demand and prices. Unscheduled write offs for the HBI plant have already been made, in the BY 2019/20.

Company write offs of a smaller scale will also be made at voestalpine Tubulars. The voestalpine production site in Kindberg, Austria, is particularly affected by the punitive tariffs imposed on European steel and aluminum products by the US administration in 2018 Section 232. As protectionist US trade policy is expected to result in an indefinite period of trade barriers, a further write off is planned in addition to the unscheduled write off made in the BY 2019/20. voestalpine Tubulars is specialized in the production of highly resilient seamless tubes for the global oil and gas industry and exports over half of its output to the USA.

The voestalpine operating result for the current business year (2020/21) appears to be developing positively. Due to current improvements in the macroeconomic environment, assuming no further restrictions such as COVID-19 lockdowns ordered by the government and the uncertainty they generate, the Management Board currently expects an EBITDA of between EUR 800 million to EUR 1 billion. In June the forecast EBITDA was between EUR 600 million and EUR 1 billion.