ArcelorMittal Cuts European Steel Consumption Outlook After Shipment, Price Declines -- Update

By Pierre Bertrand

ArcelorMittal said it expects Europe's apparent steel consumption to further degrade after reporting third-quarter earnings which, though they beat expectations, reflected declines in steel shipment and prices.

The Luxembourg-based steelmaker said Thursday that it expects 2023 European apparent steel consumption to be below the bottom end of its previous forecast, due to weak demand and construction activity.

The company had previously guided for between a 0.5% decline and 1.5% growth in European apparent steel consumption.

The downgraded outlook comes as crude steel production fell 6.5% on year on the continent and shipments fell 7.6%, due to the economic environment and weaker construction-related demand.

In Europe, sales declined 17% on year which ArcelorMittal said was mainly--in addition to lower shipments--due to 11% lower average steel selling prices.

As a group, shipments in the period decreased 3.7% from the second quarter of the year to 13.7 million metric tons and came in at nearly level with the 13.6 million tons reported for the third quarter of the prior year, ArcelorMittal said.

The company's third-quarter net profit was $929 million compared with $993 million in the prior year, on sales that fell 12% to $16.62 billion.

Meanwhile, average steel selling prices in the period fell 12%, ArcelorMittal said.

Its earnings before interest, taxes, depreciation and amortization fell 30% to $1.86 billion.

The result compares with analysts' expectations of $1.81 billion in Ebitda and $909 million in net profit, according to a company-provided consensus.

ArcelorMittal said steel shipments grew 8% on year in the Nafta region of Canada, Mexico and the U.S., but that crude production had stayed flat in the quarter.

It added that increased output from Ukraine mainly contributed to higher on-year crude steel production at ArcelorMittal's ACIS region.

ArcelorMittal still forecasts global apparent steel consumption excluding China to grow between 1% and 2% this year.

Following last month's accident at its Kostenko coal mine in Kazakhstan, ArcelorMittal said it was conducting an internal review of its safety program and is commissioning an audit of its safety practices.

Write to Pierre Bertrand at [e-mail]

(END) Dow Jones Newswires

November 09, 2023 07:06 ET (12:06 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.