ArcelorMittal added that apparent demand had improved slightly in the first quarter of the year, January 1-March 31, but it still reflected the lackluster economic backdrop. Despite that, the company reasserted its forecast that apparent steel consumption in Europe would grow by 2-4% in 2024.
ArcelorMittal predicted the same growth for the European market in its fourth-quarter report and full-year 2023 results.
In its latest financial report for the first quarter of 2024, the company added that European steel price spreads have somewhat normalized from the unsustainably low levels of the previous quarter.
Fastmarkets’ daily steel hot-rolled coil index, domestic, exw Northern Europe, confirmed that trend because the average price of such material for the first quarter of 2024 was calculated at €721.30 ($770.16) per tonne, compared with €651.08 per tonne for the last quarter of 2023.
The improved apparent steel demand in January allowed European steelmakers to secure price rises in the spot market. But sluggish real steel demand affected the apparent demand and, since the beginning of February, HRC prices in Europe have been decreasing repeatedly.
Apparent demand in European flat steel market only started to show signs of improvement in late April, and into early May, following nearly three months of pricing downtrend.
Thus, in the second half of April 2024, producers in Europe were expected to begin to seek higher prices, with cautious restocking and an uptrend in imports supporting bullish sentiment.
ArcelorMittal Europe’s key indicators
ArcelorMittal’s crude steel production from its European operations reached 7.60 million tonnes in the first quarter of 2024, compared with 6.54 million tonnes in the previous quarter.
The company’s steel shipments increased in the first quarter of the year to 7.24 million tonnes from 6.41 million tonnes in the fourth quarter of 2023. Higher figures were achieved mainly thanks to improved apparent demand in the region at the beginning of the quarter.
Sales in the first quarter of 2024 increased by 18.4% to $7.8 billion, compared with $6.6 billion in the previous quarter.
“[This was] primarily due to the improved shipment volumes, following the end of destocking, which affected the previous quarter,” the company said.
According to ArcelorMittal Europe, the average steel selling price for the first quarter of this year was $945 per tonne, up by $10 per tonne from $935 per tonne in the fourth quarter of 2023.
The operating income of the European division of the company reached $69 million in the first quarter of the year, compared with an operating loss of $4 million in the fourth quarter of last year. According to ArcelorMittal, the improved financial result was due to the higher steel shipment volumes, offset in part by higher costs.
The same factors influenced ArcelorMittal Europe’s earnings before interest, taxes, depreciation and amortization (Ebitda), which increased by 21.1% to $343 million compared with $283 million in the fourth quarter of 2023.
Sustainable development
ArcelorMittal expected that demand for its low-carbon steel would grow globally.
“Sales of our XCarb® product, which can have a carbon footprint as low as 300kg CO2 per tonne, reached 229,000 tonnes in 2023, and are expected to more than double in 2024,” the company said.
But according to Fastmarkets’ sources, the overall demand for steel with reduced carbon dioxide emissions remained comparatively low in Europe, mainly driven by the automotive and construction industries. The biggest uptake of the material was in the Nordic states, the Benelux region and Germany.
Fastmarkets’ most recent weekly assessment of the green steel, domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €150-250 per tonne on April 25, unchanged since mid-December.
“Maintaining our position as the lead supplier of low-carbon steels is a clear priority, and the planned ramp-up at Sestao [in Spain], along with the new [electric-arc furnace] in Gijon [also in Spain], which will break ground imminently, will both have an important role to play,” chief executive officer Aditya Mittal said.
“Meanwhile, our XCarb recycled and renewably produced steel will be on show to the world during the Paris Olympics,” he added, “in both the Olympic and Paralympic torches and in the Spectacular, which will be erected on the Eiffel Tower.”
According to Fastmarkets’ information, ArcelorMittal Sestao has installed capacity for about 2 million tonnes per year of crude steel. The plant also produces hot-rolled strip steel.
The Sestao mill produces recycled and renewably produced (RRP) steel, a high scrap-content product made via EAFs that use 100% renewable energy.
Carbon dioxide emissions at Sestao are around 0.5 tonnes per tonne of steel produced, compared with 2.1 tonnes of CO2 per tonne of steel produced via the traditional blast furnace route.
As ArcelorMittal previously reported, its 1.1 million tpy EAF in Gijon will become operational in the first half of 2026. At that time, the site will be able to switch to producing low carbon-emissions steel for the long products sector.
Contracts for the construction of the new capacity were signed in November last year.
According to Fastmarkets’ information, ArcelorMittal operates two BFs in Gijon with total capacity for 4.65 million tpy of pig iron. The Gijon steelworks has capacity for about 600,000 tpy of heavy plate, 600,000 tpy of wire rod, and 400,000 tpy of steel rail.
The company started low-carbon heavy steel plate production in Gijon in July 2023.
Published by: Darina Kahramanova
