International Steel Mills

ArcelorMittal Reports Second Losing Quarter

November 12, 2019

ArcelorMittal reported a third-quarter net loss of $539 million—its second quarterly loss in a row as the global steel and mining company faced lower shipments and weak steel prices in markets all over the world.

“As anticipated, we continued to face tough market conditions in the third quarter, characterized by low steel prices coupled with high raw material costs. In these markets, we remain focused on our own initiatives to improve performance and our priority is to reduce costs, adapt production and focus on ensuring the business remains cash flow positive,” said Lakshmi N. Mittal, ArcelorMittal chairman and CEO, during the company’s quarterly conference call last week.

Cutting costs and adapting production to demand may have played into the company’s decision, announced Monday, to shut down one of the three blast furnaces at its Indiana Harbor steelmaking plant in East Chicago, Ind. The company said in a statement that the blast furnace is set to shut down for maintenance and will restart when demand for steel increases. (See related story in this issue.)

ArcelorMittal’s third-quarter loss of $539 million compares to a loss of $447 million in the prior quarter and a profit of $899 million in last year’s third quarter.

Sales in 3Q 2019 totaled $16.6 billion, down from $19.3 billion for 2Q 2019 and $18.5 billion for 3Q 2018 due to lower steel shipments, lower average steel selling prices and lower market-priced iron ore shipments. Steel shipments totaled 20.2 million metric tons, 7.3 percent below second-quarter shipments largely due to seasonality, the company said.

For the nine months ended Sept. 30, ArcelorMittal reported total steel shipments of 64.8 million metric tons, a decrease of 1.8 percent over the same period last year not counting asset sales and acquisitions. Higher steel shipments in Europe (+6.9 percent) were offset by lower shipments in NAFTA (-5.8 percent) and ACIS (-5.6 percent). Sales for the nine-month period decreased by 4.5 percent to $55.1 billion primarily due to lower average steel selling prices and continued supply chain destocking, the company said.

Based on year-to-date growth and the current economic outlook, ArcelorMittal expects global apparent steel consumption to grow in 2019 by 1 percent or less, down from earlier guidance. In the U.S., given continued supply chain destocking, the company now expects apparent steel consumption to contract by as much as 1.0 percent due to ongoing weakness in automotive demand and a slowdown in machinery, offset in part by healthy nonresidential construction. Market-priced iron ore shipments for FY 2019 are still expected to be stable.