ArcelorMittal expects European steel demand to move down by a maximum of -1% this year, compared with 2018, Kallanish learns from the company’s presentation presented in its latest financial results.
The outlook is somewhat more negative that those issued by the World Steel Association (+0.3% year-on-year) and Eurofer (-0.4% y-o-y).
The company posted stable sales in Europe in Q1 2019 compared with Q1 2018. Margins have been strongly compressed however despite steel shipments having increased by almost 1 million tonnes y-o-y to 11.5mt thanks to the inclusion of Ilva’s operations in the figures.
Operating income in Europe stood at a mere $11m, down from almost $600m in Q1 2018.
The company stressed that revenues per tonne in Europe showed the sharpest deterioration for the group. “Our Europe segment was impacted by a negative price-cost effect offset in part by a 9% comparable increase in steel shipment volumes,” the company notes. (Including the impact of ArcelorMittal Italia, steel shipments increased by 14.4%).
Earlier this week ArcelorMittal announced its intention to cut some 3mt of production at its European flat product units. This is in order to face the challenges posed by the market, both in terms of demand and continous pressure from imports.
On the pricing front the company comments: “…. we note that the differential between Europe and China HRC price levels is unusually low. Typically such unusually low differentials have not persisted for extended periods.”
