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ArcelorMittal’s losses narrow in 1st qtr.

Keywords: Tags  ArcelorMittal, steel, Lakshmi Mittal, Luxembourg, Lou Schorsch


NEW YORK — ArcelorMittal SA recorded its third consecutive net loss in the first quarter on the back of challenging economic conditions but anticipates positive signs in the second half of the year, particularly in its Americas division.

The Luxembourg-based steelmaker’s first-quarter net loss totaled $345 million, a marked improvement from the $3.8-billion loss recorded in the previous quarter but a far cry from the $92-million profit logged in the first quarter of 2012. Global sales were largely flat at nearly $19.8 billion vs. $19.3 billion in the fourth quarter and $19.7 billion in the year-ago period.

For its Flat Carbon Americas segment, which includes ArcelorMittal USA LLC, ArcelorMittal Dofasco Inc., ArcelorMittal Brazil and ArcelorMittal Lazaro Cardenas, the group recorded $4.9 billion in sales in the quarter, up 4 percent from the $4.7 billion recorded the previous quarter but down 8 percent from the $5.3 billion logged in the same quarter a year ago.

The company said that the group’s sequential increase in sales was due primarily to higher steel selling prices in South America and Mexico. Average steel selling prices for the Americas segment in the quarter was $819 per tonne, up from fourth-quarter prices of $797 per tonne but down from first-quarter 2012 prices of $886 per tonne.

Shipments for its Flat Carbon Americas division were up just slightly quarter over quarter to 5.6 million tonnes as higher shipment volumes in North America due to improving automotive demand were mostly offset by lower exports of slab and hot-rolled coils from South America ( amm.com, May 10).

Looking ahead, the steelmaker’s outlook is optimistic. The company forecast an approximate 3-percent increase in global apparent steel consumption for 2013, including a 2- to 3-percent increase for the U.S. market.

"In the U.S., the economic picture remains positive," Lakshmi Mittal, chairman and chief executive officer, said May 10 during the company’s earnings call. "Because of the weaker start to the year and the impact of sequester, we have trimmed our steel demand growth forecast by 1 percent, but still expect improvement throughout the year."

Asked about imports and the lack of trade cases being filed, Louis Schorsch, chief executive officer of ArcelorMittal USA’s Flat Carbon Americas unit, said that ineffective policy has caused a delay when it comes to trade action.

"In the U.S. context, you need to show injury, and that’s typically a backward-looking perspective. Frequently, there are lags involved. That’s one of the complaints," he said.

ArcelorMittal, which is said to be a frontrunner in the bidding for ThyssenKrupp AG’s plant in Calvert, Ala., noted that the U.S. sheet market will likely see little impact either way once the winning bidder is announced.

"Obviously, the current owners are extremely capable. The assets are a very good one, yet it’s extremely difficult to make that business model work. We’re in the process now, but we’re not going to overpay. If someone else gets it, I think we’ll just cope with it like how we’ve coped with it under TK’s ownership," Schorsch said.


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