ArcelorMittal reports reduced income in Q3

Global steelmaker ArcelorMittal has reported third quarter 2024 net income of $287 million, down 43 percent compared with the prior quarter and off by 69 percent compared with one year ago.

Year to date, the Luxembourg-based mining and metals production firm has seen its net income drop by 55 percent, its operating income decline by nearly 36 percent and its total sales decline by 11 percent compared with the first nine months of 2023.

The company and its CEO say the tepid results compared have been caused by reduced demand in several parts of the world and an oversupply situation it attributes to the People’s Republic of China.

ArcelorMittal says it “believes current market conditions are unsustainable.” Adds the firm, “China’s excess production relative to demand is resulting in very low domestic steel spreads (with the majority of producers loss making) and aggressive exports; steel prices particularly in Europe are well below the marginal cost curve.”

Comments Aditya Mittal, ArcelorMittal CEO, “The increased level of imports into Europe is a concern and stronger trade measures are urgently required to address this.”

Referring to the European Union’s Carbon Border Adjustment Mechanism (CBAM), the CEO adds, “The CBAM needs further strengthening to ensure it fulfills its aim of ensuring European steelmakers can remain competitive versus higher-emissions imports.”

In its financial footnotes, the steelmaker indicates it spent $100 million in what it calls the “decarbonization capex” category in this year’s third quarter, bringing its year-to-date total in that spending category to $200 million.

ArcelorMittal says it faced a “challenging market environment” in the third quarter, but that it demonstrated a “resilient performance benefiting from regional diversification.”

Says Mittal, “Economic sentiment remains subdued, but we have delivered a resilient financial performance, reinforcing the structural strength of the group. Apparent demand is expected to be stronger in the second half of this year compared with 2023, and inventory levels are low, indicating that re-stocking will occur when real demand recovers.”

Concludes the CEO, “Globally, the medium to long-term outlook for steel is positive, and we are confident that ArcelorMittal will continue to harness its unique geographic presence and strong research and development capability to meet our stakeholders’ needs and produce smarter steels for people and planet.”