Jump in exports at ArcelorMittal SA fails to offset weak local demand
Steel sales in the quarter to end-September fell 3.7%, despite a 50.7% jump in exports during the period
ArcelorMittal SA, the local division of the world’s largest steelmaker, said on Thursday steel sales in SA during its third quarter to end-September fell as it scaled back its operations in the face of a weak domestic economy.
The company’s share price has almost halved so far in 2019, and it warned earlier in the year that about 2,000 jobs in SA may be at risk due to the weak economy, rising electricity and iron ore costs, as well as higher rail and transport tariffs.
Local sales fell 16.9% to 737,000 tons to end-September, while exports jumped 50.7% to 324,000 tons. Overall sales fell 3.7%.
Weak local demand was largely as a result of planned production curtailment at Vanderbijlpark and customers driving down stock levels, the company said.
Tepid demand in SA was also evident in its coal division, with commercial coke sales falling 50.4% to 22,000 tons and tar sales 10.5% to 2,000 tons.
Liquid steel production declined 18.2% or 236,000 tons. This was also due to a planned production curtailment, with capacity utilisation at Vanderbijlpark falling to 65% from 85% previously.
ArcelorMittal SA’s share price had closed at R1.70 on Wednesday evening, having fallen 49.85% so far in 2019 and 85% since the beginning of 2017.