ArcelorMittal is calling for stronger trade measures to address increased imports into Europe, where steel prices remain below marginal cost. This comes as the group reported lower on-year consolidated shipments and earnings in the third quarter.
Q3 consolidated steel shipments fell 2% on-year to 13.4 million tonnes, while crude steel production was down 3% to 14.8mt. Sales dropped 9% to $15.2 billion. Net income attributable to equity holders of the parent fell 69% to $287 million, while, adjusted to exclude impairments and exceptional items, income fell 47% to $488m. Ebitda dropped 26% to $1.58 billion.
ArcelorMittal’s provided comparison to the previous quarter indicates Q3 operating profit was impacted by impairments of $36m related to the closure of the coke oven battery in Krakow. Moreover, it incurred exceptional items of $74m due to restructuring costs at the same site. Ebitda was hampered by weaker results in North America and Europe, partly offset by higher volumes and lower costs in the Brazil segment.
The firm reiterates that China’s excess production relative to demand is resulting in very low domestic steel spreads – with the majority of producers loss making – and aggressive exports. Global demand remains subdued, with no signs of restocking activity as customers maintain a wait and see approach, it adds.
“Economic sentiment remains subdued, but we have delivered a resilient financial performance, reinforcing the structural strength of the Group,” ArcelorMittal chief executive Aditya Mittal says in a report seen by Kallanish. “Apparent demand is expected to be stronger in the second half of this year compared with 2023, and inventory levels are low, indicating that re-stocking will occur when real demand recovers.”
“The increased level of imports into Europe is a concern and stronger trade measures are urgently required to address this. Similarly, the CBAM needs further strengthening to ensure it fulfills its aim of ensuring European steelmakers can remain competitive versus higher-emissions imports,” he concludes.
In the nine months through September, steel shipments fell 4% on-year to 40.7mt, while crude steel production fell 1% to 43.9mt. Sales dropped 11% to $47.7 billion. Net income fell 55% to $1.7 billion or 51% on an adjusted basis to $1.9 billion.
Adam Smith Poland
