ArcelorMittal increases capacity in line with demand

ArcelorMittal is bringing European crude steel capacity back on line to match the increase in apparent demand, the company's chief financial officer Genuino Christino said today.

Across ArcelorMittal's whole European business, around 10pc of blast furnace capacity is off line, compared with 20pc over the fourth quarter, Christino added. The company's crude steel production declined by 19.3pc year on year in the October-December period, while shipments fell 18.3pc.

In Poland, blast furnace three has come back after idling, but only as another unit was taken down for maintenance. At its Dunkirk site in northern France, the company is now running two furnaces up from one, and the third at the site is now end-of-life. The Fos-sur-Mer blast furnace in France that was idled at the end of last year remains off line for now. In Germany, all furnaces are operational, but at a reduced capacity.

The company's Asturias blast furnace in Spain is operating at around 70pc of capacity after restarting recently.

ArcelorMittal's sales in the fourth quarter fell by 16.6pc year on year, driven by lower shipments and selling prices. Apparent demand in the EU plunged by almost 20pc in the fourth quarter of 2022, driven by the significant destocking among service centres. Over the whole of last year, apparent demand dropped 7-7.5pc.

But the company sees conditions strengthening in Europe and elsewhere, and apparent and real demand realigning at present. It forecasts apparent demand increasing 0.5-2.5pc this year, although real demand will decline marginally — real demand showed positive growth in 2022, Christino added.

The company remains "optimistic" that the important automotive sector will be supportive in 2023, driven by demand backlogs and low inventories, he told Argus. Despite the huge volatility in coil prices of recent years, the company has not really amended its policy of fixed-price year contracts with automakers, which value stability.

ArcelorMittal's European segment made a loss of $10mn in the fourth quarter, compared with a profit of $1.8bn in the same period of 2021.

By Colin Richardson.