ArcelorMittal Sees Another Quarter in the Red
05/06/2016 - The world's largest steelmaker posted another unprofitable quarter on Friday, recording a net loss of US$416 million due to low steel prices.
The company reported first-quarter sales of US$13.4 billion, a decline of 22 percent from 2015. Despite the decline, the company narrowed its losses from US$728 million a year ago.
The company's steel shipments remained flat at 21.5 million metric tons, compared to 21.6 million metric tons last year. Iron ore shipments, however, declined 9.1 percent to 14.1 million tons.
The company said the decline in ore shipments was offset by improving prices and lowered costs in its mining unit.
"Our results for the first quarter reflect the very tough operating conditions in the second half of 2015," said ArcelorMittal chairman and chief executive Lakshmi N. Mittal said in a statement.
"Since that time we have seen a recovery in spreads in our core markets to more sustainable levels, which is expected to result in improved results in the coming quarters. This is a welcome development, although given the levels of excess capacity in China the market remains fragile and we must continue to be vigilant and active against the threat of unfair trade."
Steel prices are indeed rising, and steelmakers generally are looking for results to improve later this year. That's especially so in the United States, where a variety of trade cases have begun to deter imports.
However, challenges remain.
“We do not think the industry is healthy; we don’t think it is sustainably a high-return business,” Seth Rosenfeld, an analyst with the securities firm Jefferies told The New York Times in an interview.
The company's steel shipments remained flat at 21.5 million metric tons, compared to 21.6 million metric tons last year. Iron ore shipments, however, declined 9.1 percent to 14.1 million tons.
The company said the decline in ore shipments was offset by improving prices and lowered costs in its mining unit.
"Our results for the first quarter reflect the very tough operating conditions in the second half of 2015," said ArcelorMittal chairman and chief executive Lakshmi N. Mittal said in a statement.
"Since that time we have seen a recovery in spreads in our core markets to more sustainable levels, which is expected to result in improved results in the coming quarters. This is a welcome development, although given the levels of excess capacity in China the market remains fragile and we must continue to be vigilant and active against the threat of unfair trade."
Steel prices are indeed rising, and steelmakers generally are looking for results to improve later this year. That's especially so in the United States, where a variety of trade cases have begun to deter imports.
However, challenges remain.
“We do not think the industry is healthy; we don’t think it is sustainably a high-return business,” Seth Rosenfeld, an analyst with the securities firm Jefferies told The New York Times in an interview.
