ArcelorMittal Expects A 9.5% Increase In NAFTA's Steel Consumption Growth While Construction Markets Remain Sluggish
ArcelorMittal, in the company’s online Q&A session, discussed many things, including their global amount of blast furnaces in operation. During the second quarter 2011, the company operated 49 out of 63 blast furnaces, which was about the same as the 1Q 2011.
Compared to 1Q11, steel shipments remained flat in 2Q11 due to “demand weakness towards the end of the second quarter driven by weaker market sentiment and destocking ahead of the seasonally slow third quarter. Consequently, the seasonal slowdown in the third quarter is expected to be less pronounced than historic comparisons.”
Inventories were stable at 104 days for the second quarter with net inventories increasing by $2.3 billion due to increased prices. However, the company said, “Finished steel inventories level at service centers and distributors in US, Europe and China are at or below historic average levels. Destocking continues in Brazil.”
When asked about the company’s expectations for apparent steel consumption for the full year 2011, ArcelorMittal reported “We forecast global apparent steel consumption to be between 7-7.5% in 2011 (compared to 14.4% in 2010) vs. our previous forecast of 6.5-7%.” For NAFTA, apparent steel consumption growth is expected to remain at +9.5%, compared to 21% in 2010.
As for the end markets performance, the U.S. construction market remains the under-performer at 30% below 2007 levels. Conversely, machinery and equipment markets show strong performance in Germany and the U.S. Auto production is slightly behind the machinery and equipment market, but is still showing growth, especially in the commercial vehicle market.
The Japan crisis was said to have a delayed impact on NAFTA and European customers for the automotive business, but ArcelorMittal said, “Impacted OEM’s recovered faster than we initially predicted.”
The company’s iron ore expansion at AMMC is expected to increase iron ore production from 16 million tons to 24 million tons, with production beginning in 2013.