Global steelmaker ArcelorMittal expects steel demand to improve by Q3 (July-Sep) and Q4 (Oct-Dec) of fiscal year 2020 due to easing of lockdown measures, said a company release on July 30. However, the pace of recovery remains uncertain with some regions severely affected by the COVID-19 pandemic.
In Q2 (Apr-June) and H1 (Jan-June) of 2020, steel demand declined on the back of COVID-19 related disruptions, stringent lockdown measures and automotive sector being hit.
The company posted a net loss of $559mn for Q2 of 2020 from $447mn in the prior year period. In H1, the company clocked a net loss of $1,679mn from $33mn in the previous H1. In Q2, sales were $11bn, down by 43pc from $19.3bn in the corresponding period in 2019 on the back of lower steel shipments. Steel shipments declined by 23.7pc from the prior year period as the demand was significantly impacted across all steel segments.
In Q2, company reported EBITDA of $707mn, down by 27pc from $967mn, while in H1, the company posted EBITDA of $1.7bn, down by 47.8pc from $3.2mn in the prior year period due to challenging working environment driven by COVID-19 pandemic and weak pricing levels in most markets.
The company has pinned hopes on European Green deal and government’s incentives for electric vehicle transition that could spur demand for steel.
In Q2, AMNS, a joint venture between ArcelorMittal and Nippon Steel, produced 1.2mn mt of crude steel, down by 29pc from 1.7mn mt in Q1 2019. EBITDA in the quarter was down by 24pc to $107mn from $140mn in the prior year quarter. Steel demand gradually improved as the government eased lockdown measures. Moreover, government stimulus is likely to boost economy.
The company has acquired the Odisha Slurry Pipeline Infrastructure for net $245mn (₹18.6bn) which secures an important infrastructure asset for raw material supply to Hazira steel plant.