ArcelorMittal's Q3 steel output jumps 19% from Q2 amid recovery in end markets

Singapore — Luxembourg-based ArcelorMittal's global crude steel production rose to 17.2 million mt in the third quarter, jumping 19.4% from Q2, the steelmaker said Nov. 5, citing a gradual recovery in steel end-markets and in particular the automotive sector.

However the volume was still down 22.5% year on year, the company said.

"The third quarter marked an improved operating performance for the group, with steel markets recovering gradually from the very challenging second quarter after the ending of lockdowns," ArcelorMittal chairman and CEO Lakshmi Mittal said in a statement.

"All steel segments saw improved demand, with Brazil and ACIS [Africa and Commonwealth of Independent States] showing particularly encouraging profitability improvement," he added.

The steelmaker posted a Q3 net loss of $261 million, narrowing from both a $559 million loss in Q2 and $539 million loss in Q3 2019.

'Healthy order books'

In a call on the Q3 results, Aditya Mittal, president and CFO of ArcelorMittal and CEO of ArcelorMittal Europe, sounded a relatively optimistic note. Although the company is prepared for further volatility given the recent rise in COVID-19 cases worldwide, he said the impact on the economy should not be as bad as in the second quarter.

"We believe the impact will be more in the service sector, much less in the manufacturing sector. If we look into Q4 our order books are very healthy, lead times are still lengthening and inventories in the systems are still very low. We saw automotive demand coming back in Q3 and we see demand coming back across the board," he said.

He noted however that if COVID-19 cases continue rise and lockdowns are widened, there is a threat to consumer sentiment which would not be a good development for end-demand.

"I think we have to balance that with stimulus measures, depending on the trajectory of the virus," he said on the call.

Emissions reductions

ArcelorMittal reiterated its plans to reduce emissions to zero by 2050, which includes ramping up from offering 30,000 mt of green steel in 2020 to 120,000 mt in 2021 and 600,000 mt in 2022.

The company said it was running several projects using increased hydrogen to lower the carbon dioxide emissions from iron ore reduction in blast furnaces across Europe.

"A number of other hydrogen projects are planned, pending innovation funding," it added.

The steelmaker said it also plans to resume its phase two expansion project in Liberia, which involves a 15 million mt/year iron ore concentrator that started up in 2013 but was halted a year later due to a force majeure resulting from an Ebola outbreak.

"The plan is now to recommence the project in 2021, with first concentrate production expected Q4 2023," ArcelorMittal said.