Järnmalmer’s sales rose by around 40% to SEK 440 million, the highest sales figure in the company’s almost 70-year history. The company has been riding a strong business cycle both in Sweden and internationally, where demand for our products has been good.
We have broadened our presence in the international market mainly through trading steel scrap with deliveries from Russia. Today we are represented with sales in major parts of Asia. In line with an increasingly rigorous environmental policy, especially in China, raw scrap materials are becoming increasingly important in these countries in the production of metals and steel.
China, which accounts for almost half of all the new steel in the world today, has decided to increase the amount of scrap in relation to ore in its steel production to, among other things, reduce carbon dioxide emissions and emissions of other pollutants. China’s goal is that a ton of new steel will be produced from 220 kg of scrap by 2020. Today, the figure is 104 kg per ton. According to the Metal Bulletin (March 2017), China will have to import about 30 million tons of steel scrap per year to reach the targets. In 2015 the figure was 2 million tons.
These are significantly ambitious goals that have been set and regardless of whether they are met, the need for scrap will increase according to many reviews. By turning to scrap-based raw materials instead of ore, the result is that carbon dioxide emissions will be reduced by more than 90% per ton produced. Swedish ore-based steelworks are now also considering major investments by phasing out their blast furnaces and replacing them with electric furnaces. Such a phasing out would mean greater demand for scrap, less need for ore and, in particular, less greenhouse gas emissions, even in Sweden.
Järnmalmer has invested a little over SEK 25 million in the Göteborg branch over the past business year, and above all, the installation of a larger electric scrap shear triples our capacity for cut and pressed products. It increases efficiency, reduces emissions and enables a greater flow of material for recycling into the plant.
As our main export is in USD, the strong dollar has improved our margins in Swedish currency. Järnmalmer reported a profit of around SEK 23.2 million after net financial items for the 2016/2017 business year. It is the result of a fantastic job by our talented employees, suppliers and partners. It is also an acknowledgment that Järnmalmer’s long-term business model is in a highly competitive industry. With an equity/assets ratio of about 80%, it gives us the ability to handle the challenges of the future.