AUS
NZ
UK
CA
USA
IND
ArcelorMittal (MT) has revised its global steel consumption outlook downward, citing declining steel prices and reduced shipments that have adversely impacted its second-quarter earnings. The Luxembourg-based steel giant now expects world steel consumption, excluding China, to grow by 2.5% to 3% in 2024, down from the previously anticipated growth of 3% to 4%.
Updated Outlook and Market Conditions
The adjustment in outlook reflects a cautious economic sentiment, with customers hesitant to restock inventories. The company noted that overall economic conditions remain subdued, contributing to a more conservative forecast. Specifically, ArcelorMittal has downgraded its steel consumption growth expectations for the U.S. while raising them for Brazil and India. The forecast for Europe has been lowered, and steel consumption in China is expected to remain relatively stable.
Despite these challenges, ArcelorMittal anticipates a recovery in demand in the latter half of 2024, projecting higher demand than in the same period of the previous year. This optimism is tempered by the realities of the first half of the year, where average steel selling prices dropped by 7.5%, and steel shipments in the second quarter fell by 2% year-over-year to 13.9 million metric tons. Steel production remained flat at 14.7 million tons.
Financial Performance and Strategic Projects
The financial performance for the second quarter reflected the challenging market conditions. ArcelorMittal reported a net profit of $504 million, a significant decrease from $1.86 billion in the same period last year. Sales also dropped by 13% year-over-year, totaling $16.25 billion. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) fell by 38% to $1.86 billion.
ArcelorMittal's performance in the second quarter was largely in line with the first quarter, indicating consistent market challenges.
Looking ahead, ArcelorMittal is focusing on strategic projects in Brazil, India, Liberia, the U.S., and France. These projects are expected to add approximately $1.8 billion to the company's earnings potential by the end of 2026.
