(MENAFN-AFP)
ArcelorMittal, the world’s second-largest steelmaker, saw its net profit fall by 78% in the third quarter of 2022, as steel costs fell from “exceptional” grades in the post-Covid recovery and energy costs soared.
The global metal market is suffering from slowing economic expansion in China, the world’s largest user of metal, and from the fallout from the war in Ukraine and rising power in Europe.
From July to September, ArcelorMittal said in a statement that it made a net profit of $993 million compared with $46 billion in the same quarter last year, bringing profit for the first nine months of the year to $9 billion from $10. 9 billion last year.
“The market situation we have enjoyed during the peak of the past two years deteriorated in the third quarter, seasonal declines in shipments, reduced exceptional value levels, reduced inventories and emerging energy prices combined to put pressure on earnings,” said Aditya Mittal. CEO of ArcelorMittal.
While expressing confidence in his group’s resilience, he cautioned that “the short-term outlook for the industry remains and caution is advised. “
In September, ArcelorMittal announced it would close two of its blast furnaces in Europe due to high energy costs and falling demand.
Its furnaces in Bremen, northern Germany, and near Gijon in northern Spain, will stop working until more is produced by the end of the month, he said.
The chief executive of the group’s partially dormant Hamburg site, Uwe Braun, told AFP in October that its fuel bill was seven times higher than it was before Russia invaded Ukraine.
In Thursday’s update, the steelmaker said it had cut its fuel consumption in Europe by 30 amid emerging costs.
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Total metal shipments in the third quarter were down just over 7% compared to the same quarter a year earlier, which the organization says largely reflects lower demand and seasonality in Europe.
But such shipments “remain broadly stable,” with the exception of ArcelorMittal Kryvyi Rig, which is affected by the war in Ukraine.
Work was halted for a month as Russian forces approached Kryvyi Rig, but it resumed at a reduced pace.
The steelmaker also said it is moving towards a decarbonization target for its long-term business strategy.
Mittal said in Thursday’s update that the organization hoped the COP27 summit in Egypt would lead to “the intensification of renewable energy, whether for the decarbonization of the metal and the improvement of energy security. “
The update indicates that the organization inaugurated its first low-carbon metals production assignment in Canada, which eliminates coal from the iron-making process.
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