Vesuvius Trading Update
Sales for the year to the end of October are 5,2 % below the corresponding period last year at constant currency. However thanks to ongoing self-help actions, margins broadly similar to last year have been maintained. The restructuring initiatives are being enhanced and some early benefit in the 2015 results is expected. Global steel production for the year to date to September was 2,4 % lower compared to the same period last year, as reported by the World Steel Association. Although there was growth in India, this was offset by a decline in China and EMEA and the continuing reduced levels in US production volumes. Steel producers have taken measures to preserve cash by destocking inventories, reducing purchases of consumables, curtailing production volumes and either mothballing or closing the least profitable plants. Steel producers in the US and Great Britain have been hit particularly hard due to the strengthening of the US dollar and Sterling, coupled with weakening demand from the oil and gas industry. This destocking effect has amplified the decline in demand for Vesuvius products over the year. Market conditions in the global foundry industry have remained challenging, particularly in mining in the US, Brazil and Australasia. Although there has been some improvement over the quarter in light vehicle production, most notably in North America and Europe, steel foundries principally servicing capital equipment continue to be affected by the reduction in capital expenditure in all of our the company´s major markets.