Trade disruption could lead to downside risks to the previous forecast of higher apparent demand on-year in 2025, says ArcelorMittal. Steel spreads have recovered in Europe thanks to policy measures, but remain depressed in China amid excess capacity.
Robust underlying demand continues in India, with newly approved safeguards expected to support prices, while tariffs are supporting values in the US. The Steel and Metals Action Plan, enhanced safeguards against imports and the German infrastructure fund are supporting the outlook in Europe.
However, “the Action Plan now needs to be supported by rapid implementation; of critical importance is visibility on the provision of industry access to competitive energy, an effective CBAM and Trade defences. At that point, the Company will be able to review its investment priorities for the Europe segment,” ArcelorMittal notes in a report seen by Kallanish.
In February, the firm said demand should grow, with restocking activity supplementing real demand improvement amid low inventory levels. However, the firm had expressed a similar expectation a whole year earlier, but restocking ultimately failed to materialise in 2024. The latest downside risks refer especially to the US and China, it says.
Despite a more uncertain outlook, the company has made no changes to its investment plans. Capital expenditure in 2025 is projected to be within the range of $4.5-5 billion, including $1.4-1.5 billion on strategic growth projects and $0.3-0.4 billion on projects related to decarbonisation.
ArcelorMittal’s consolidated steel shipments inched up 1% on-year in the first quarter to 13.6 million tonnes. Crude steel production rose 3% to 14.8mt. Sales fell 9% to $14.8 billion, with net income down 14% to $805 million. Ebitda fell 19% to $1.58 billion, with Ebitda margin down 1.32 percentage points to 10.7%.
In Europe alone, steel shipments rose 4% on-year to 7.5mt and Ebitda margin grew to 5.1% versus 4.4% a year earlier, while North America Ebitda margin dropped to 16.5% versus 21% a year earlier.
“Heightened uncertainty around the terms of global trade is hurting business confidence and risks causing further economic disruption if not quickly resolved. It is encouraging however that around the world, governments are committed to supporting their domestic manufacturing industries,” says ArcelorMittal chief executive Aditya Mittal.
Adam Smith Poland
