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Last Updated : Feb 06, 2020 12:48 PM IST | Source: Reuters

ArcelorMittal sees 2020 steel pick-up as debt hits low

Market conditions remained challenging, but there were early signs of improvement, particularly in ArcelorMittal's core markets of the United States, Europe and Brazil, Chief Executive Lakshmi Mittal said.

ArcelorMittal
ArcelorMittal

ArcelorMittal, the world's largest steelmaker, forecast increased steel consumption in its core markets in 2020 after reporting a higher-than-expected annual profit and its lowest ever level of debt.

Market conditions remained challenging, but there were early signs of improvement, particularly in ArcelorMittal's core markets of the United States, Europe and Brazil, Chief Executive Lakshmi Mittal said.

"With inventory levels having reached a very low level following a period of destocking, we are seeing customers return to the market, supporting an improved pricing environment," Mittal said in a statement on Thursday.

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Mittal said 2019 was a very tough year, with the company making a net loss of $2.45 billion, but the steelmaker had made strides towards its goal of bringing the net debt below $7 billion.

Net debt fell to $9.3 billion at the end of 2019, the lowest level ever since the company was formed in 2006 through the merger of Arcelor and Mittal Steel.

The Luxembourg-based company said its fourth-quarter core profit (EBITDA), the figure most watched by the market, was $925 million, compared with the average forecast of $858 million in a company poll.

ArcelorMittal said global steel consumption, including the impact of inventory changes, would grow in 2020 by 1-2% after an expansion of 1.1% in 2019.

In the United States, steel consumption would be up to 1% higher than in 2019, when it dropped 1.7%, while in Europe, consumption would grow by between 1% and 2% after a 4.3% slump last year, although the automotive sector would remain weak.

Steel demand in Brazil would also return to growth this year.

ArcelorMittal ships almost half its steel to European customers, around a quarter to the United States and has negligible business in China, which is the world's largest steel producer and consumer.

ArcelorMittal said it expected the coronavirus outbreak to have a short-term negative impact on demand in China and to a lesser degree elsewhere, unless the situation worsened.

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First Published on Feb 6, 2020 12:44 pm
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