Acerinox's Q3 profit set to mirror Q2 as European recovery lags
Expects Q3 EBITDA to be similar to Q2
Q2 EBITDA dragged by strike in Cadiz mill
Says demand remains weak in Europe
Adds sector context in paragraphs 2 and 9, details on outlook and results in paragraphs 3 and 7, peer in paragraph 8
By Matteo Allievi and Javier West
July 24 (Reuters) -Spanish steelmaker Acerinox ACX.MC said on Wednesday its third-quarter core earnings (EBITDA) would be similar to those in the previous three months, which slumped by 47% year-on-year due to a strike impact and a slow recovery in Europe.
European steelmakers are struggling to recover after a severe reduction of their inventories, as they need to tackle swings in prices of raw materials and cooling global demand, coupled with cheaper Asian steel imports.
Acerinox said the European market had not rebounded as much as expected and final demand remained soft, but the U.S. market was stable, supported by its high performance alloys division.
The company's shares were up 2.7% at 0806 GMT.
Its EBITDA fell to 125 million euros ($135.55 million) in the second quarter from 236 million a year earlier. That included a 28 million euro hit from a five-month strike at its Cadiz steel mill in Spain.
Workers at the mill resumed their activities at the end of June after they reached a deal with the company for new contracts that include wage increases.
"The lack of visibility remains for the third quarter, despite the fact that wholesalers' inventories are below the historical average," Acerinox said in a statement.
Swedish peer SSAB SSABa.ST warned on Wednesday of a steeper steel demand decline in the third quarter amid lower U.S. heavy plate prices and a still weak European market.
The European Steel Association Eurofer has downgraded the 2024 steel consumption outlook twice, and now projects year-on-year growth of 3.2% due to geopolitical tensions, economic uncertainty and high interest rates.
($1 = 0.9222 euros)
Reporting by Matteo Allievi and Javi West Larrañaga; editing by Milla Nissi
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