Chesterton Tribune

 

 

ArcelorMittal profits down; steel glut and imports are blamed

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By KEVIN NEVERS

ArcelorMittal is reporting a net income in the first quarter of 2019 of $414 million or basic earnings per share of 41 cents, compared to $1.19 billion or $1.18 in the fourth quarter and $1.19 billion or $1.17 in the year-ago period.

“Our first-quarter results reflect the challenging operating environment the industry has faced in recent months,” ArcelorMittal Chair and CEO Lakshmi Mittal said in a statement released today. “Profitability has been impacted by lower steel pricing due to weaker economic activity and continued global overcapacity, as well as rising raw material costs as a result of supply-side developments in Brazil.”

“We continue to face a challenge from high levels of imports, particularly in Europe, where safeguard measures introduced by the European Commission have not been fully effective,” Mittal added. “Although we are somewhat encouraged by the firmer price environment in China, this is not being reflected in Europe, where in order to adapt to the current market environment we have recently announced production cuts of 3 million tons in our flat-steel operations. It is important there is a level playing field to address unfair competition, and this includes a green border adjustment to ensure that imports into Europe face the same carbon costs as producers in Europe.”

“We remain focused on our own initiatives to improve performance through delivery of our Action 2020 plan,” Mittal said. “Generating positive cash flow and demonstrating progress in our efforts to further strengthen our balance sheet and improve shareholder returns are the priority.”

1Q Numbers

--Sales: $19.18 billion ($18.32 billion 4Q, $19.18 billion year-ago).

--EBITDA (earnings before interest, taxes, depreciation, and amortization): $1.65 billion ($1.95 billion 4Q, $2.51 billion year-ago).

--Operating income: $769 million ($1.04 billion 4Q, $1.56 billion year-ago).

--Operating income per ton: $35 ($51 4Q, $73 year-ago).

--Shipments: 21.8 million metric tons (20.2 million 4Q, 21.3 million year-ago).

--Crude steel production: 24.1 million metric tons (22.8 million 4Q, 23.3 million year-ago).

No. 2 Coke Battery Rebuild

Meanwhile, ArcelorMIttal USA reported last week that the No. 2 coke battery at the Burns Harbor facility is now undergoing a “much-needed rebuild,” in a project approved in May 2018 at a total estimated cost of $19.25 million over five years.

The decision to spread the rebuild over the next five years was made so that the battery may be kept at full production, so as to “mitigate the need to purchase expensive coke on the spot market.” Spot-market purchases could potentially increase costs at the Burns Harbor and Indiana Harbor facilities by as much as $50 million, the company said.

The No. 2 coke battery was originally built in 1974 and last saw a pad-up rebuild in 1994. Since then the battery “has performed exceptionally well, producing more than 900,000 tons of coke for Burns Harbor’s two blast furnaces,” the company noted.

 

Posted 5/9/2019

 

 
 
 
 

 

 

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