SSAB presents plan to strengthen its position towards 2030
SSAB presents the plan to strengthen its position towards 2030 at the Capital Markets Day in Stockholm. The policy decision communicated last year to transition to sustainable steelmaking is expected to deliver higher profitability and a better ability to manage cyclical fluctuations. At the same time, the carbon footprint of the group can be dramatically reduced.
“SSAB is in a position of strength as we have built a more resilient and profitable company. We are now stepping up our ambitions. Today, we are launching a brand new steel, SSAB Zero, with 0.0 kg of CO2e emissions – the first commercial product in the world of its kind. We are updating our financial targets and can now build further to reach industry-leading profitability. The focus in the coming years is on our investment program, which will result in an improved cost position and the possibility to drive our carbon dioxide emissions down to almost zero”, says Martin Lindqvist, SSAB’s President and CEO.
Lower cost and better flexibility
Customer demand is driving development towards sustainable products and last year SSAB took a policy decision to accelerate the transform to fossil-free steelmaking already in around 2030. The plan primarily involves building two modern highly efficient mini-mills in Luleå, Sweden and Raahe, Finland.
This will mean lower production costs and possibilities to improve the product mix through greater capacity for further processing. The new production system will also strengthen flexibility, with a high share of variable costs, which in turn will increase resilience in downturns of business cycles. Investments in the transformation of the Nordic production system (Oxelösund, Luleå and Raahe) are expected to total of around SEK 50 billion, in line with earlier estimate.
“The transformation can lower our costs by around SEK 5 billion and we see a potential from higher volumes of high-strength steel and other premium products to deliver an approximate additional SEK 3.6 billion. In addition, we estimate a positive impact of significant volumes of SSAB Zero and SSAB Fossil-free. Altogether, we can see an annual earnings potential of at least SEK 10 billion once the transformation is completed,” says Martin Lindqvist.
The potential means an annual improvement in earnings post 2030 compared with a scenario of SSAB retaining its existing blast furnace system.
New growth targets
The increased capacity for further processing will allow SSAB to continue growing within high-strength steels. SSAB Special Steels aims to deliver 2.2 million tonnes of high-strength steels in 2030. During 2022, shipments amounted to 1.4 million tonnes. SSAB Europe plans shipments of 1.2 million tonnes of premium products and 1.4 million tonnes of Automotive AHSS products in 2030. This compares to 0.8 million and 0.5 million tonnes respectively in 2022. At the same time, the shipments of standard products will decrease.
SSAB estimates that the gross premium on steels with almost zero fossil CO2e emissions will be around EUR 300/tonne against the backdrop of the price of carbon dioxide emissions in Europe, higher production costs and the value added for the customer. The aim is to deliver 40,000 tonnes of SSAB Zero in 2023, ramping up to around 100,000 tonnes in 2025.
“We have an exciting time ahead of us and SSAB has a unique possibility to strengthen our competitiveness, which in turn creates value for all the company’s stakeholders. Nevertheless, we need support from society, especially with regard to effective permit processes and access to electricity at the right time. It is also important with a relatively level playing field across the EU regarding state aid for the transition in the steel industry,” says Martin Lindqvist.
You can follow the presentations via the Capital Markets Day webcast at https://edge.media-server.com/mmc/p/gryt96x8
For further information, please contact:
Viktoria Karsberg, Head of Corporate Identity and Group Communications,
viktoria.karsberg@ssab.com, phone: +46 72 233 5288
Per Hillström, Head of Investor Relations, per.hillstrom@ssab.com, tel. +46 702 95 2912
SSAB is a Nordic and US-based steel company. SSAB offers value added products and services developed in close cooperation with its customers to create a stronger, lighter and more sustainable world. SSAB has employees in over 50 countries. SSAB has production facilities in Sweden, Finland and the US. SSAB is listed on Nasdaq Stockholm and has a secondary listing on Nasdaq Helsinki. www.ssab.com.
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