African steel demand boosts ArcelorMittal SA
The steelmaker managed to grow the amount of steel it sold by 5%, despite a 4% slump in its home market
ArcelorMittal SA’s share price jumped 15% to R3.95 on Thursday morning after it released its 2018 financial year results, showing a return to profit as forecast in a trading statement last week.
The SA operations of the world’s largest steelmaker reported a net profit of R1.3bn for the year to end-December, a recovery from 2017’s R5.1bn loss.
Revenue grew 16% to R45bn due to a 5% increase in the volume of steel sold.
The group managed to grow the overall volume of steel it sold thanks to demand from the rest of Africa offsetting a 4% drop in SA consumption, CEO Kobus Verster said in the results statement.
Verster was ArcelorMittal SA’s CFO until he left to head Aveng in 2011 and then returned as the steelmaker’s CEO in January 2018.
“SA and key African markets continue to face the threat of steel imports, mainly from China. Although there was a 20%, or 190,000 tons, decrease in imports, 769,000 tons of primary carbon steel were still imported into SA in the year, despite import duties, selective safeguarding and the designation of local steel,” Verster said.
“In Africa, steel markets remained positive due to the drive towards infrastructure investments, especially in rail, roads and energy projects, notably in the west and east sub-Saharan regions,” Verster said.