UPDATE 1-Acerinox H1 profit falls on weak nickel prices

Wed Jul 25, 2012 2:57am EDT

Related Topics

* Net profit falls 61 pct to 40.2 mln euros

* EBITDA down 36 pct to 165.9 mln euros

* Acerinox hopes for recovery when economic headwinds calm (Adds detail, statement)

By Clare Kane

MADRID, July 25 (Reuters) - Spanish stainless steel maker Acerinox on Wednesday reported a 61 percent fall in first-half net profit, hit by weak nickel prices and sluggish demand in Europe.

Acerinox, which produces around 10 percent of the world's stainless steel, said net profit for the six months to end-June was 40.2 million euros ($48.6 million) just below a 43.7 million forecast in a Reuters poll.

The metal producer said it hoped for a quick pick-up in demand once there was more clarity on economic growth, given that stock levels worldwide were at record lows.

"The level of stock that end-clients and distributors hold is at record lows all over the world, which makes us hope for a rapid recovery as soon as economic and financial turbulence subsidies and there is more visibility and confidence," Acerinox said in a statement.

Oversupply and declining demand during the worldwide economic downturn have impacted stainless steelmakers this year, with a pick-up in the Americas the only bright spot.

Steelmakers have not been helped by the falling price of nickel, a key input for many stainless steel grades, which has encouraged distributors to hold off buying in the hopes that prices could dip further.

Nickel prices have dived more than 25 percent on the London Metal Exchange since early February.

Acerinox has plants in Spain, the United States, South Africa and Malaysia, with North America its biggest market, shielding it from the worst of the European gloom.

The company said earnings before interest, taxes, depreciation and amortisation, or EBITDA, fell 36 percent to 165.9 million euros. ($1 = 0.8275 euros) (Reporting by Clare Kane)

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