ArcelorMittal crude steel production drops by just over 20% in 2020

2022-05-29 12:28:05 By : Mr. Sucre Xi

Impacts from the COVID pandemic and asset sales saw ArcelorMittal report a 20.4% decline in its crude steel production in 2020.

“The countries worst affected by COVID were the ones that saw drops in their production,” one industry watcher added about lower production at the group’s assets in Europe, Brazil and the United States.

ArcelorMitttal poured a total 71.5 million metric tons of liquid steel in the 12 months of 2020. Meanwhile, it poured almost 90 million metric tons in 2019, the group noted Feb. 11.

Shipments for the year came to 69.1 million metric tons, down 18.2% year on year from 84.5 million metric tons, ArcelorMittal added.

The Europe segment recorded a decline of 22.6% to 34 million metric tons from almost 44 million metric tons. Meanwhile, shipments in that segment fell to 32.8 million metric tons. That total marked a decline of 22.5% from 42.3 million metric tons.

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Improved demand from the automotive and manufacturing sectors pushed up crude production in the last quarter of 2020. Q4 2020 production rose by over 15% to 9.11 million metric tons from the 7.9 million metric tons produced in Q3.

Overhaul of a blast furnace in Belgium, however, offset that increase.

“Although the company has restarted capacity, some steel-making capacity during [Q4] remained idled, including a blast furnace at Ghent, Belgium, that is due to restart mid-February 2021 following a planned major reline,” the group said.

Higher flats demand also helped to boost quarter-on-quarter shipments 4.7% to 8.6 million metric tons from 8.2 million metric tons, ArcelorMittal added.

The December sale of ArcelorMittal USA to Cleveland Cliffs pushed down crude production in North America 18.7% to 17.8 million metric tons from almost 22 million metric tons, the group said.

Shipments for the year were down to 9.41 million metric tons, the group noted, reflecting a 15.9% decline from almost 11.2 million metric tons.

ArcelorMittal announced in September that it had reached agreement with Cleveland-Cliffs for the $1.4 billion sale of its ArcelorMittal USA segment.

Among those assets are steelmaking sites with a total 18 million short tons of crude capacity. The facilities includes:

Those plants’ rolled product assortment included merchant bar, rails, hot and cold rolled coil, plate and downstream products, such as hot dipped galvanized coil and aluminized sheet.

ArcelorMittal now retains under the newly named NAFTA segment the Dofasco plant in Canada. The plant has a blast furnace, basic oxygen furnace and an electric arc furnace from which it casts crude steel into slab for rolling into flat products.

The group also has an electric arc furnace at its at Longueil works (also in Canada). The site casts slab and billet, respectively, for clients and for rolling into bars and wire rod.

South of Canada, ArcelorMittal also retains the Shelby and Marion plants in Ohio for production of pipe products, including seamless.

In addition, ArcelorMittal retains the Lázaro Cárdenas integrated plant in Mexico for production of long and flat rolled products.

Crude steel production in the ArcelorMittal Brazil segment in 2020 fell 16% to 9.41 million metric in 2019.

Meanwhile, shipments for the year fell 15.9% to 9.41 million metric tons from 11.2 million metric tons.

Improved market sentiment also prompted a 24.7% increase in the Brazil segment’s Q4 crude steel production to almost 2.9 million metric tons.

“Steel shipments in Q4 2020 increased by 6.1% to 2.6 million metric tons as compared to 2.4 million metric tons in 3Q 2020, with 26.4% increase in flat product shipments (primarily due to improved export demand), offset in part by lower domestic long products shipments following an exceptionally strong third quarter,” the parent company stated.

Meanwhile, ArcelorMittal’s ACIS segment, which includes steelmaking assets in South Africa, Kazakhstan and Ukraine, posted a 22% decrease in its crude production to 13 million metric tons.

However,  Q4 output increased by 5.1% to 2.7 million metric tons. The bounceback came primarily due to a recovery in volume in Ukraine following planned maintenance in Q3 2020.

ArcelorMittal also announced Feb. 11 that its board of directors has appointed Aditya Mittal as chief executive officer.

He replaces his father Lakshmi Mittal, who will become executive chairman and continue to lead ArcelorMittal’s board of directors.

Aditya Mittal’s previous roles were as chief financial officer and president of the group. He also served as CEO of ArcelorMittal Europe. That segment has steelmaking and rolling assets in Belgium, Bosnia and Herzegovina, France, Germany, Italy, Luxembourg, Poland and Spain.

It is unlikely his appointment to the company’s helm will result in any changes in the short term, industry watchers told MetalMiner.

“This is not his first year. He is by far not new,” one source said about Aditya Mittal’s background and experience with the group.

Aditya was already de facto CEO, as he was running strategy within the group, a second source noted.

Aditya’s tenure will face capital expenditure necessary for converting ArcelorMittal to greener technology. The company is aiming for carbon neutrality by 2050. Furthermore, it aims to reduce its carbon emissions 30% by 2030.

“He’s probably better placed” for this role, the second analyst added.

Aditya joined ArcelorMittal’s predecessor company Ispat International in 1997 to oversee its initial public offering on the New York Stock Exchange. He had previously been an investment banker at Credit Suisse.

He then became head of Ispat’s mergers and acquisitions and led the company’s expansion into Eastern Europe, ArcelorMittal noted.

Aditya also led the combination of Ispat International with LNM Holdings.

Mittal participated in the 2006 merger of Mittal Steel and Arcelor, creating ArcelorMittal. He became CEO of ArcelorMittal Americas within the merged entity and became president of the group in 2018.

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