Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

ArcelorMittal expects improved demand and supportive inventory to increase steel consumption in its core markets in 2020.

 

The company has projected signs of improvement mostly in its US, European, and Brazilian core markets. Inventory has reached low levels during de-stocking, but the company sees customers returning and supporting better prices, the steelmaker indicated while releasing its earnings for FY 2019 and Q4 2019.

 

In 2019, the company’s crude steel production decreased to 89.8mn mt compared to 92.5mn mt in 2018. Crude steel production for Q4 2019 was 19.8mn mt, down from 22.8mn mt in Q4 2018. Steel shipments increased to 84.5mn mt in 2019, from 83.9mn mt in the previous year, but were down for Q4 2019 at 19.7mn mt compared with 20.2mn mt during the same quarter in 2018.

 

Sales also decreased from $76bn in 2018 to $70.6bn in 2019 and from$18.3bn in Q4 2018 to $15.5bn in Q4 2019.

 

The steelmaker’s 2019 earnings before interest, taxes, depreciation and amortization almost halved to $5.2bn compared to $10.2bn in 2018. It generated $2.4bn free cash flow in 2019 signaling debt reduction while reporting a net loss of $2.5bn during the year. The company ended the year with a gross debt of $14.3bn and net debt of $9.3bn, the lowest level since the 2006 merger of Arcelor and Mittal Steel.

 

ArcelorMittal noted, while 2019 was a tough year as reported in reduced profits, cash generation was healthy which helped net debt drop to lowest levels seen. 

 

Additionally, the company announced that the Essar Steel India acquisition in partnership with Nippon Steel was completed, adding opportunity for the group in the rising Indian market. The merger is performing well, according to the company, and offers significant potential to triple crude steel production over the next 10 years.

Leave a Reply

Your email address will not be published.