By Pierre Bertrand
ArcelorMittal said it believes demand for steel will improve this year after fewer impairment charges and other exceptional items led to a narrowed net loss in the last quarter of 2024.
The Luxembourg-based steelmaker said that it expects apparent steel consumption, a measure of steel demand, to rise by 2.5% to 3.5% this year compared with 2024 when excluding China. ArcelorMittal expects this increase to support growth in steel shipments.
Apparent steel consumption is expected to rise to as much as 2% in Europe, and by 1% to 3% in the U.S. Consumption in Brazil is expected stable after 8% growth in 2024, while it is expected to rise 6% to 7% in India, the company said. Apparent steel consumption in China is also expected to be stable.
The expectation comes after a year marked by weak demand--particularly in Europe--and by global overcapacity due to exports from China.
"China has a problem today with too much capacity and the demand locally continues to suffer, especially because of the residential market, so they continue to export significant volumes that we believe cannot be absorbed," said Genuino Christino, ArcelorMittal's chief financial officer.
The excess production is not sustainable, putting pressure on prices across the globe and keeping utilization rates down, he said.
ArcelorMittal's sales in 2024 declined by 8.5% to $62.4 billion, as average steel selling prices fell by 7.6% and shipments slipped by 2.4%.
Average steel selling prices in the fourth quarter in Europe, where ArcelorMittal produces most of its crude steel, fell to $852 per ton, down from $935 a ton a year ago.
Lower interest rates in Europe, however, are expected to have a positive impact on the European economy and, if real demand stays stable, some degree of restocking could be ahead this year, Christino said.
The company said it made a $390 million net loss for the fourth quarter, compared with a $2.97 billion loss a year prior when earnings were hit by the disposal of its Kazakh operations and by an impairment charge related to Acciaierie d'Italia.
ArcelorMittal said its quarterly result reflected $80 million in impairments related to the closure of the ArcelorMittal South Africa long business and to civil works in Brazil, as well as $142 million in exceptional items, including restructuring charges at its sustainable solutions division.
The company is targeting an about $400 million increase to its earnings before interest, taxes, depreciation and amortization this year as the company completes projects in India and Brazil and ramps up another in Liberia.
Those projects, including the plan to construct a new electrical steel plant at its U.S. joint venture, Calvert, have the potential to increase Ebitda by $1.9 billion, the company said.
Quarterly Ebitda came to $1.65 billion, a 14% on-year increase, the company said.
Sales for the quarter came to $14.71 billion, a 1.1% increase.
Write to Pierre Bertrand at pierre.bertrand@wsj.com
(END) Dow Jones Newswires
February 06, 2025 07:52 ET (12:52 GMT)
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