Slovenian SIJ Optimistic About 2025: Steel Demand Recovery and EU Support
Slovenian Steel Group, despite facing a series of challenges in 2024, remains cautiously optimistic about the steel industry’s prospects in 2025. SIJ, which is one of the leading steel producers in Slovenia, recorded a revenue of €1 billion in 2024, which was consistent with the previous year’s results. However, the company faced a decline in EBITDA, which decreased to €51 million from €73.3 million in 2023. The net loss for 2024 stood at €15.4 million, indicating the difficult operating environment. Despite these hurdles, SIJ’s leadership, including Vice President Tibor Šimonka, expects a recovery in the steel market starting this year, with demand for certain products already showing signs of growth.
SIJ’s outlook for the coming years reflects a cautious but optimistic view. The company projects steady growth in demand through 2025 and 2026, which they attribute to factors such as lower interest rates and increased investments in steel-consuming sectors. In the first two months of 2025, SIJ has already shown operating results that align with or even exceed its forecasts, further bolstering their confidence for the year ahead.
Financial Performance and Challenges in 2024
In 2024, SIJ’s revenue of €1 billion remained steady compared to 2023, but the company experienced a significant decline in profitability. The reduction in EBITDA, dropping from €73.3 million in 2023 to €51 million in 2024, was a reflection of the difficult conditions in the steel market, including fluctuating steel prices and global supply chain disruptions. SIJ also faced a net loss of €15.4 million in 2024, which was a notable setback for the company after it had previously been on a positive trajectory.
A Positive Outlook for 2025
Looking forward to 2025, SIJ forecasts revenue in the range of €1.05 billion to €1.11 billion, with EBITDA expected to fall between €61 million and €85 million. The company is hopeful that the steel market will begin to recover in 2025, driven by growing demand for steel products. Additionally, SIJ is optimistic that the European Union’s proposed support plan for the steel industry will help address high energy costs and improve the overall competitiveness of European steelmakers.
SIJ’s Vice President Tibor Šimonka expressed that demand for certain steel products is already on the rise, which has contributed to the company’s confidence in meeting or exceeding its forecasts for 2025. The ongoing recovery in the market, combined with a favorable macroeconomic environment, has provided a solid foundation for SIJ’s optimistic outlook.
Energy Prices and U.S.-China Competition: Ongoing Challenges
However, SIJ continues to face key challenges that could impact its operations in 2025. High energy prices remain a major concern for steelmakers, particularly in Europe, where the cost of energy has been a significant burden for industrial manufacturers. SIJ is looking to the European Commission for further support to alleviate these rising energy costs, which will be crucial for maintaining the profitability of steel companies across the continent.
In addition to energy costs, SIJ also faces competition from Chinese steelmakers, who have an advantage in terms of production costs and market reach. While this competition remains a persistent challenge, SIJ is taking steps to navigate these competitive pressures and maintain its market position.
U.S. Market and Trade Relations
SIJ generates approximately 10% of its revenue from the U.S. market, and the company anticipates continued demand growth from this region in 2025. However, there are uncertainties regarding new tariffs on steel imports into the U.S., which could potentially affect SIJ’s ability to compete in the American market. In response to this, SIJ’s leadership remains hopeful that a compromise will be reached regarding the U.S. tariffs on steel, possibly in the form of import quotas. Such a resolution would help SIJ maintain its foothold in the U.S. market while navigating the challenges posed by protectionist trade measures.
Expansion into the Middle East: A Strategic Move
In addition to addressing domestic challenges, SIJ is also looking beyond Europe to expand its footprint in new markets. The company has set its sights on the Middle East, where there is increasing demand for steel products. SIJ is considering building a €1.5 billion plant in Saudi Arabia, which would manufacture electrical steel and hot-rolled steel. This move would allow SIJ to tap into the growing demand in the Middle East while benefiting from lower energy costs, which are a significant advantage for industrial operations in the region.
By diversifying its operations and entering new markets, SIJ hopes to strengthen its position in the global steel market and reduce its reliance on the European market, which has been struggling with higher energy costs and economic uncertainties.
The European Union’s Role in Steel Industry Competitiveness
SIJ is also closely monitoring the European Commission’s efforts to support the competitiveness of the European steel industry. With the steel market facing intense pressure from high energy prices and competition from other regions, SIJ is hopeful that the EU will implement measures to help European steelmakers remain competitive on the global stage. These measures could include support for energy-intensive industries or initiatives aimed at reducing carbon emissions, which would be particularly beneficial for SIJ as it works to maintain its position in the European market.
Key Takeaways:
• Revenue Stability: SIJ reported €1 billion in revenue in 2024, maintaining its performance from the previous year despite challenges in the market.
• Profit Decline: EBITDA for 2024 decreased to €51 million from €73.3 million in 2023, and the company faced a net loss of €15.4 million.
• Optimistic Outlook for 2025: SIJ forecasts revenue growth of 5-11% and expects EBITDA between €61 million and €85 million, driven by increased demand and market recovery.
• Energy Prices a Key Challenge: High energy prices remain a major concern for steelmakers, and SIJ is seeking support from the European Commission to address this issue.
• Expansion Plans in the U.S.: SIJ expects continued growth in demand from the U.S. market, despite uncertainties over new tariffs on steel imports.
• Middle East Expansion: SIJ is exploring a €1.5 billion plant in Saudi Arabia to capitalize on growing demand and lower energy costs in the region.
• EU Support for Steel Industry: SIJ hopes for timely European Commission action to enhance the competitiveness of the European steel sector, particularly regarding energy costs and carbon emissions.
