Luxembourg-based global steelmaker ArcelorMittal has reported narrower profits in this year’s second quarter compared with the prior one and has expressed concerns about overcapacity in the global steel market.
In the April through June 2024 time frame, ArcelorMittal reports net income of slightly more than $500 million, down 46 percent from the $938 million earned the prior quarter. The company cites impacts of “non-cash items” tied to a mark-to-market situation of shares of Vallourec, a fellow steelmaker in which it is purchasing a 28 percent stake.
The company, which also owns iron mines, coal mines, scrap yards and other raw materials assets, says its “resilient operating results” benefited from that diversification strategy.
Reporting on its company growth and capital expenditure projects, ArcelorMittal says its investment in the Calvert, Alabama, electric arc furnace (EAF) mill is “nearing completion,” as is a project to add electrical steel production in France.
In the outlook section of comments accompanying its second quarter results, ArcelorMittal writes in part that the “company believes current market conditions are unsustainable. China’s excess production relative to demand is resulting in very low domestic steel spreads and aggressive exports; steel prices in both Europe and the United States are below the marginal cost.”
Contrary to a gloomy situation on the supply side, ArcelorMittal says globally it “expects apparent demand to be higher in the second half of 2024 versus the second half of 2023,” which it says “was impacted by destocking particularly in Europe.”
Continues ArcelorMittal, “As absolute inventory levels remain low, particularly in Europe, the company remains optimistic that restocking activity will occur once real demand begins to recover.”
ArcelorMittal CEO Aditya Mittal expresses optimism about the firm’s capital expenditure projects and the future of its low-carbon steel business.
“Demand continues to grow for our XCarb recycled and renewably produced steels, which are currently shining brightly on the Eiffel Tower and Arc de Triomphe in the form of the Olympic ‘Spectacular’ rings and Paralympic ‘Agitos,’” says the CEO.
“We also continue to progress our decarbonization agenda, with groundbreaking having taken place on the new 1.1 million-metric-ton-per-year electric arc furnace in Gijón [Spain],” adds Mittal.
Concludes the CEO, “Financially, performance in the second quarter was broadly similar to the first, reflecting the continued subdued economic sentiment. Inventories are at a low level which will support apparent steel demand growth ex-China of between 2.5 percent and 3 percent this year. The company enjoys a healthy balance sheet, from which it can continue to invest for growth and market share and consistently return cash to shareholders."
Courtesy : recyclingtoday.com
