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Released November 12, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Despite supply-chain issues, a drop in shipments and weaker demand from automotive customers, global steel producer ArcelorMittal S.A. (NYSE:MT) (Luxembourg, Luxembourg) reported its highest quarterly profit since 2008 on Thursday. Higher steel price spreads more than offset the lower steel shipments, according to the company. Industrial Info is tracking more than $9 billion worth of active capital projects by ArcelorMittal, including its joint-venture projects in the U.S.
ArcelorMittal reported $4.6 billion in net income for the just-ended third quarter, compared with a net loss of $261 million in third-quarter 2020. Sales totaled $20 billion in the third quarter, compared with $19 billion in the second quarter of this year and $13 billion in third-quarter 2020, even though third-quarter 2021 steel shipments amounted to 14.6 million tons, down from 16 million tons in second-quarter 2021 and 17.5 million tons in third-quarter 2020.
"Our third quarter results were supported by the continuing strong price environment, resulting in the highest net income and lowest net debt since 2008," said Chief Executive Officer Aditya Mittal in an earnings press release. "Despite the volatility we continue to see as a result of the ongoing presence and repercussions of COVID-19, this has been a very strong year for ArcelorMittal."
Increases in steel price spreads more than offset weaker demand, in particular automotive order cancellations, as well as production constraints and order shipment delays, the company reported.
In China, there was a "clear drop" in demand during the third quarter, driven by a slowdown among steel-intensive sectors and power constraints, Mittal said during the company's earnings conference call with industry analysts. This resulted in a 9% drop in steel production from levels in the second quarter, resulting in a dip in domestic consumption as well as exports. The 20% drop in exports helped to support global steel markets, he continued.
Looking forward, ArcelorMittal expects its steel shipments to increase in the fourth quarter, even though automotive demand is unlikely to improve substantially until the second half of 2022, Mittal said.
The company highlighted a raft of projects in various stages of development across the globe, including several tied to its goal to achieve carbon neutrality by 2050.
Click on the image at right for a graph showing ArcelorMittal's capital project spending by world region, including its joint-venture activity in the U.S.
In Canada, ArcelorMittal and the government have announced plans to invest C$1.7 billion (US$1.35 billion) to reduce carbon emissions from the Dofasco steel operations in Hamilton, Ontario, by 60%. The plan, contingent on financial support from the governments of Canada and Ontario, includes construction of a 2 million-metric-ton-per-year direct reduced iron (DRI) facility and an electric arc furnace (EAF) capable of producing 2.4 million metric tons of steel per year through existing metallurgy and casting facilities. The new DRI facility and EAF are planned to be in production before the end of 2028. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here to learn more about the DRI plant addition and here to learn about the EAF addition.
In the U.S., ArcelorMittal shed many of its assets when it sold the operations of its U.S. subsidiary, ArcelorMittal USA LLC, to Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio) in 2020. Those assets included six steelmaking facilities, eight finishing facilities, two iron ore mining and pelletizing operations, and three coal and coke-making operations. For more information, see September 29, 2020, article - The Iron Giant: Cleveland-Cliffs Strives for Bigger, Better Things with ArcelorMittal USA Acquisition.
However, the company maintains a presence in the U.S. via its AM/NS Calvert 50/50 joint venture with Nippon Steel Corporation (Tokyo, Japan) in Alabama. In February, AM/NS broke ground on a new $775 million steelmaking facility at the Calvert site. The planned EAF addition will be capable of producing 1.5 million tons per year of steel slabs for the operation's hot strip mill. Subscribers can click here for more information on the Calvert Carbon Steel Processing Plant EAF Addition.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
ArcelorMittal reported $4.6 billion in net income for the just-ended third quarter, compared with a net loss of $261 million in third-quarter 2020. Sales totaled $20 billion in the third quarter, compared with $19 billion in the second quarter of this year and $13 billion in third-quarter 2020, even though third-quarter 2021 steel shipments amounted to 14.6 million tons, down from 16 million tons in second-quarter 2021 and 17.5 million tons in third-quarter 2020.
"Our third quarter results were supported by the continuing strong price environment, resulting in the highest net income and lowest net debt since 2008," said Chief Executive Officer Aditya Mittal in an earnings press release. "Despite the volatility we continue to see as a result of the ongoing presence and repercussions of COVID-19, this has been a very strong year for ArcelorMittal."
Increases in steel price spreads more than offset weaker demand, in particular automotive order cancellations, as well as production constraints and order shipment delays, the company reported.
In China, there was a "clear drop" in demand during the third quarter, driven by a slowdown among steel-intensive sectors and power constraints, Mittal said during the company's earnings conference call with industry analysts. This resulted in a 9% drop in steel production from levels in the second quarter, resulting in a dip in domestic consumption as well as exports. The 20% drop in exports helped to support global steel markets, he continued.
Looking forward, ArcelorMittal expects its steel shipments to increase in the fourth quarter, even though automotive demand is unlikely to improve substantially until the second half of 2022, Mittal said.
The company highlighted a raft of projects in various stages of development across the globe, including several tied to its goal to achieve carbon neutrality by 2050.
In Canada, ArcelorMittal and the government have announced plans to invest C$1.7 billion (US$1.35 billion) to reduce carbon emissions from the Dofasco steel operations in Hamilton, Ontario, by 60%. The plan, contingent on financial support from the governments of Canada and Ontario, includes construction of a 2 million-metric-ton-per-year direct reduced iron (DRI) facility and an electric arc furnace (EAF) capable of producing 2.4 million metric tons of steel per year through existing metallurgy and casting facilities. The new DRI facility and EAF are planned to be in production before the end of 2028. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here to learn more about the DRI plant addition and here to learn about the EAF addition.
In the U.S., ArcelorMittal shed many of its assets when it sold the operations of its U.S. subsidiary, ArcelorMittal USA LLC, to Cleveland-Cliffs Incorporated (NYSE:CLF) (Cleveland, Ohio) in 2020. Those assets included six steelmaking facilities, eight finishing facilities, two iron ore mining and pelletizing operations, and three coal and coke-making operations. For more information, see September 29, 2020, article - The Iron Giant: Cleveland-Cliffs Strives for Bigger, Better Things with ArcelorMittal USA Acquisition.
However, the company maintains a presence in the U.S. via its AM/NS Calvert 50/50 joint venture with Nippon Steel Corporation (Tokyo, Japan) in Alabama. In February, AM/NS broke ground on a new $775 million steelmaking facility at the Calvert site. The planned EAF addition will be capable of producing 1.5 million tons per year of steel slabs for the operation's hot strip mill. Subscribers can click here for more information on the Calvert Carbon Steel Processing Plant EAF Addition.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
