Luxembourg-based steel producer ArcelorMittal, which has operations in Europe, the Americas and Asia, says its third-quarter 2022 results were less profitable than those from one year ago because of “a negative price-cost effect, energy costs headwinds and a 5.6 percent sequential decrease in steel shipments.”
The company’s output of 13.6 million metric tons of steel was 7.1 percent lower than what it produced in the third quarter of last year, says ArcelorMittal.
The firm still garnered $1 billion in net income for the most recent quarter, but that is down 74 percent from its $3.9 billion income garnered the prior quarter. It is down 78 percent from the $4.6 billion earned in the third quarter of last year.
Aditya Mittal, ArcelorMittal CEO, says, “The strong market conditions enjoyed for much of the past two years deteriorated in the third quarter as seasonally lower shipments, a reduction in exceptional price levels, destocking and higher energy costs combined to put profits under pressure.”
Those deteriorating conditions have been highly visible in the ferrous scrap market, where prices in the United States have been falling for several months consecutively. Scrap that had been worth between $500 and $600 per ton in April has in recent weeks fallen well below $400 per ton in value.
The CEO says the company intends to continue with its decarbonization plan, which includes several conversions from blast furnace/basic oxygen furnace steelmaking to electric arc furnace (EAF) production. “The group’s decarbonization goals remain a central part of the strategy, with a key development being the groundbreaking last month in Ontario, Canada, for a new direct reduced iron [DRI]-EAF plant, which is hydrogen ready,” says Mittal.
Looking ahead, Mittal comments, “The short-term outlook for the industry remains uncertain and caution is appropriate. But, ArcelorMittal has the strength, resilience and experience to face the future with confidence. Supported by a strong balance sheet, we will continue to focus on executing our strategy, designed to ensure our long-term sector leadership, as well as deliver sustainable investor returns.”
In addition to shipping less steel in this year’s third quarter, ArcelorMittal mills produced 13 percent less steel than it did in last year’s third quarter. In 2021’s third quarter, its mills achieved 17.2 million metric tons of output compared with just 14.9 million metric tons in this year’s third quarter.