In 2015, market conditions deteriorated globally. A key factor was the significant decline in the price of our products by an average of 10% to 15%, caused by a global overcapacity in steel production. In addition, the demand in many of our market segments stagnated. Industrial markets only recovered moderately from the crisis in recent years. Production volumes for most customers were limited and purchasing volumes were low. The effects of the considerable drop in the price of oil were very noticeable in the Energy segment. All of our customers in this sector were confronted with the postponement and cancellation of investments as a result of which the demand for our products
In spite of the reduced market demand, Van Leeuwen realized a slight growth in the tonnage sold in comparison to 2014 and increased its market share. However, this tonnage was sold at considerably lower prices causing income to decrease. Furthermore, the limited market demand further fueled price competition. The combination of lower prices and increased competition resulted in a significantly lower gross margin on sales.
Deliveries from stock increased slightly. Distribution from stock is becoming more important for a large number of customers since our customers have an increasing need to manage and reduce the costs
of their production processes. We were able to effectively respond to this with our stocks, storage facilities and treatment facilities. In 2015, we expanded many of our long-term partnerships with customers. Furthermore, we signed new partnership contracts with existing and new customers in 2015.
In 2015, Van Leeuwen supplied to many large Energy projects in Belgium, the Middle East, Asia, Australia and South America. However, many of these projects had been initiated in 2014, and were investments in downstream, generally petrochemical plants. The drop in demand from larger projects in the upstream segment in countries such as Canada and Brazil was significant. During the year, Van Leeuwen’s project teams therefore focused more and more on new projects in the downstream segment. Investment in this segment is presently still high.