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ArcelorMittal beats estimates and maintains a positive outlook on the medium-long term prospects of the steel market, despite a still difficult situation for producers. An important signal of trust for the manufacturer, which in recent months has had to face and resolve critical dossiers, such as that relating to the Kazakh mining activities (disused after the accident which caused the death of 46 people) and the direct presence in Italy in carbon steel, which failed following the Meloni Government’s decision to place the former Ilva under commissionership.
The company, the world‘s largest steel maker outside China, reported first-quarter gross profit of $1.96 billion, compared to an analyst consensus of $1.71 billion. Net income was $938 million, compared to a loss of $2.9 billion reported in the fourth quarter of 2023 and compared to net income of $1.096 billion in the same period a year earlier. In the first quarter, Ebitda was 1.956 billion, while revenues stood at 16.282 billion, down 11.9% compared to 18.5 billion in the same period of the previous year. The average sales prices of steel – underlined the company – increased by 4.8% compared to the fourth quarter of last year. “An improved pricing environment, combined with the recovery in volumes, has led to improved quarter-on-quarter results, which now also reflect the value delivered by our joint ventures,” CEO Aditya Mittal said, presumably referring to ArcelorMittal’s initiatives on the dynamic Indian market. The Group, meanwhile, also confirmed the forecasts on apparent steel consumption outside China (a key barometer of the world economy), formulated three months ago.
Deliveries amounted to 13.5 million tonnes, when in the first quarter of 2023 they were 14.5 million, while in the fourth quarter of 2023 they were 13.3 million. “Although general economic sentiment remains moderate,” Aditya Mittal said, “we expect apparent demand for steel outside of China to grow between 3% and 4% this year and are well positioned to benefit from this improvement.
ArcelorMittal notably said it was positioned for a recovery in demand after margins in the steel sector eroded. The global market has been hampered by manufacturing and construction difficulties, triggered by the Chinese real estate crisis and weak growth in many of the world‘s largest economies. Sentiment appears to have reached its lowest level – explains the company – and, given low inventories especially in Europe, as real demand begins to gradually improve, apparent demand is expected to rebound. In Europe – the Word Steel Association declared last month – steel demand, challenged by high inflation and more restrictive monetary policy, is expected to show very modest growth, ahead of an expected increase of 5.3%. in 2025.
As mentioned, the last few months have been complicated for the steel group. Last year the company was forced to sell its operations in Kazakhstan after a mining disaster killed 46 workers; Furthermore, in February ArcelorMittal lost control of the Italian assets of the former Ilva, placed under administration by the Italian Government.