2017 was a significant and challenging year for Union Electric Åkers. Global steel demand began to make a comeback in the fourth quarter of 2016. There was some recovery in the North American oil and gas markets. And throughout 2017, we continued to see ongoing but moderate growth in global steel demand.
Mr. T.V. Narendran, Chairman of the worldsteel Economics Committee, reported “encouraging” progress in the global steel market in 2017. “We have seen the cyclical upturn broadening and firming throughout the year leading to better than expected performance for both developed and developing economies,” he stated.
In fact, according to worldsteel’s global steel production statistics for 2017, global crude steel production, increased by 5.3% over 2016. The EU saw an increase of 4.1% over the prior year, and in North America, production was 4.8% higher than in 2016. Despite these positive movements, we also experienced challenging headwinds.
As to be expected, our manufacturing costs increased due to growing product demand. Upward pricing pressures on the cost of key raw materials, combined with the shortages of other steelmaking consumables such as electrodes and refractories, also contributed to increased operating costs. The most surprising shortage was the lack of capable machinists and other skilled craftsmen which slowed our ability to ramp production. The need to outsource additional labor to support this growing volume of business, further negatively impacted the company’s performance.
Although we experienced difficulties, we also saw success:
1. Union Electric Åkers added a significant new accredited aluminum mill to our customer list, demonstrating our growing presence among major aluminum rolling mills around the world.
2. In December, we introduced TwinAlloy™ Steel, a new generation of breakthrough performance-grade rolls, with the release of VICTURA™, the first product in the series.
3. Union Electric Åkers was strongly represented at AISTech in Nashville in May with the presentation of two papers (see the article titled “”).
4. Our R&D team presented at ABM Week 2017 in Brazil in October (see the article titled “”). Both conferences gave us an opportunity to showcase our advances in research and development.
5. INVICTA continued to gain acceptance in cold mills meeting the ever-increasing demands on cold rolled products like rolling Advanced High Strength Steel (AHSS) materials
There’s more to come from Union Electric Åkers in 2018. We will continue to invest in quality and manufacturing processes to deliver superior value to our customers, and introduce product and service advancements that secure our position as the preferred brand. I won’t be satisfied until we are able to outperform our customer’s expectations. And I know that you, our valued customer, will not be satisfied until we get there.
Thank you for giving us the opportunity to serve you.
Ladies and Gentlemen, Let’s Roll!
President, Union Electric Steel Corporation