ArcelorMittal: Pricing is improving, politics is ‘structurally changing’ Europe's prospects
CBAM and the new EU trade regime have "structurally changed" the prospects for the European steel industry: lower imports are expected to lead to increased capacity utilization and profitability, ArcelorMittal said in a statement. The Company expects that the significant improvement in the global price environment observed in recent months will be reflected in the results of the second quarter.
The policy reinforces the transition to regionalized steel markets as a result of increased trade protections in response to excess production capacity in China. This favors ArcelorMittal's business model, which is based on local manufacturing to meet the demand of local consumers, the firm notes.
With the beginning of the phased introduction of CBAM and the abolition of free discounts on ETS, the increased carbon costs are reflected in European steel prices. With the introduction of CBAM, the additional cost of CO2 emissions is expected to be offset by steel prices starting in the 2nd quarter, the group said.
The new trade regime is expected to reduce imports by 13 million tons compared to 2025, and the "melt and pour" requirement will improve traceability, limit circumvention, and increase supply chain transparency, he adds.
Consolidated steel shipments in the first quarter decreased by 6% year-on-year to 12.8 million tons, while crude steel production decreased by 10% to 13.3 million tons. Sales, however, rose 4% to $15.5 billion, but adjusted net income fell 29% to $575 million. Ebitda increased by 6% to $1.68 billion.
"Performance in the first quarter was robust despite the volatile situation in the Middle East, with an Ebitda margin of $131 per tonne, reflecting the benefits of our globally diversified asset portfolio and consistent application of our strategy," ArcelorMittal Chief Executive Aditya Mittal said in the group's latest earnings report. Callanish.
On the policy-driven growth prospects in Europe: "ArcelorMittal is well positioned to take advantage of this advantage through existing capacity and the relaunch of idle capacity. In Europe, this will lead to a higher utilization of domestic production capacities and the restoration of profitability and ROCE to a healthy, sustainable level," he adds.
Earlier this week, the company restarted its blast furnace No. 3 in Dombrowa Gornica in Poland.
Author: Adam Smith
Kallanish.com