Issue 31, 2024 - This week's editorial: ArcelorMittal slashes earnings, aggressive Chinese exports

ArcelorMittal has lowered its forecast for global apparent steel consumption growth excluding China in 2024 to 2.5-3% on-year, from 3-4%. Customers are maintaining a “wait and see” approach, with the long-awaited restocking yet to materialise, the firm notes.

In the first half of 2024, ArcelorMittal consolidated steel shipments fell 5% on-year to 27.3 million tonnes and crude steel output was flat at 29.1mt. Revenue dropped 12% to $32.5 billion and net income slumped 51% to $1.44 billion. The firm says excess Chinese capacity and “aggressive” exports contributed to US and Europe steel prices being at below marginal cost. China’s excess production relative to its demand has resulted in very low domestic steel spreads and pushed steel onto export markets.

ArcelorMittal’s steel shipments in Q2 dropped 2% on-year to 13.9 million tonnes, while crude steel production was flat at 14.7mt. Consolidated sales declined 13% to $16.2 billion, while net income attributable to equity holders of the parent fell 73% to $504 million. Ebitda fell 38% to $1.86 billion.

The firm faced operational challenges in Q2, including the blockade impacting Mexico operations and wildfires impacting iron ore operations in Canada.

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