ArcelorMittal sees steel demand growth slowing in 2022

ArcelorMittal expects global apparent steel consumption growth to slow in 2022, dropping to between flat and a 1% increase, against a 4% pace of growth in 2021, the company said, when also announcing its best annual performance since 2008 thanks to high steel prices in the market.

ArcelorMittal Chief Executive Aditya Mittal said that steel demand from China is expected to continue to contract this year, though overall global consumption from other countries is expected to increase by up to 3%.

The company said it expects shipments to rise by approximately 3% this year compared with the 62.9 million mt shipped in 2021 driven by real and apparent consumption.

The CEO also said ArcelorMittal expects another strong year in terms of EBITDA thanks to recently renegotiated annual contracts with automotive companies amid a strengthening market.

ArcelorMittal reported an EBITDA of $19.4 billion for 2021 up from $4.3 billion in 2020.

Last year, ArcelorMittal crude steel production dropped to 69.1 million mt compare with 71.5 million in 2020, but it said that higher prices sustained profit levels.

"2021 was a strong year in which we accelerated progress on many fronts," Mittal said. "The global economic rebound post initial COVID-19 restrictions being lifted supported buoyant demand in all markets delivering very high levels of profitability. This further strengthened our balance sheet and enabled the delivery of consistent returns for shareholders as well as targeted investment in our business."

In Q4 2021, ArcelorMittal registered total steel shipments up by 7.9% compared with Q3 2021 and up by 8.5% compare with Q4 2020 to 15.8 million mt. Sales in 4Q were $20.8 billion as compared with $20.2 billion for 3Q 2021 and $14.2 billion for 4Q 2020. Sales in 4Q 2021 were up 47% on the year, primarily due to significantly higher average steel selling prices (up 60%) offset in part by lower iron ore reference prices (down 17%).

The company said it managed to mitigate the impact of cost pressures. During a call with journalists, Mittal said that he sees higher energy costs as being "cyclical" rather then "structural", adding that assuming there is no further spike he doesn't expect this to have another significant impact on the company results.

He also said that "another area where our costs are increasing is met coal and there could be some impact in met coal in 2022 results."