ArcelorMittal sees steel demand outside China growing 3%-4% in 2024

ArcelorMittal has reiterated its forecast for global steel demand, predicting growth outside of China of 3%-4% in 2024 and staying bullish on the medium/long-term steel demand outlook.

In its first-quarter earnings report, the world's second-largest steelmaker said sentiment appears to have reached a floor, "and given the low inventory environment -- particularly Europe -- as soon as real demand begins to gradually improve, apparent demand is expected to rebound."

ArcelorMittal produced 14.4 million mt of crude steel in the first quarter, down 0.7% from Q1 2023, amid output declines in Europe, where the company has its largest slice of business, as well reduced sales. Steel shipments in the first quarter totaled 13.5 million mt, down from 14.5 million mt in Q1 2023.

Crude production and shipment volumes in the first quarter rose respectively by 4.98% and 1.49% quarter on quarter sustained by restocking and improved demand.

"On financial performance, the improved pricing environment combined with recovering volumes resulted in sequentially stronger quarterly results, which also now reflect the value contributed by our joint ventures," CEO Aditya Mittal said.

Sales in the first quarter rose 11.9% quarter on quarter to $16.3 billion, reflecting an increase of 4.8% in average steel selling prices, the company said.

Hot-rolled coil prices in Europe began to rise after reaching bottom in the third quarter of 2023, moving from Eur600/mt ex-works Ruhr on Oct 19 to Eur760/mt at the beginning of February and averaging closing the first quarter at Eur665/mt base ex-works, according to S&P Global Commodity Insights data. Platts, part of S&P Global, on May 1 assessed HRC in Northwest Europe up Eur5/mt on the day at Eur640/mt ($683.584/mt) ex-works Ruhr.

The company's crude steel production in Europe reached 7.60 million mt in the first quarter, down from 7.68 million mt in Q1 2023, while steel shipments totaled 13.5 million mt, down from 14.5 million mt.

ArcelorMittal's Q1 crude steel production would have been lower if not for a spike in output at its Brazilian operations, where output surged 16.7% year on year to 3.56 million mt.

AMNS India, a joint venture with Nippon Steel, also performed well, producing 2 million mt of crude steel in the first quarter. Steel shipments in the quarter also totaled 2 million mt, up 7.9% quarter on quarter.

In North America crude steel production in the first quarter totaled 2.18 million mt, in line with 1Q 2023, while shipments stood at 2.8 million mt.

Its AM/NS Calvert joint venture with Nippon steel produced 1.2 million mt of crude steel in the first quarter, up 15.6% quarter on quarter following planned maintenance in 4Q 2023.

Sustainable development

ArcelorMittal said it was making prgress with the engineering of its DRI/EAF decarbonization projects across Europe and Canada, which are expected to be completed by the end of 2024. The company is working with governments on energy costs and capacity.

"We continue to progress with our decarbonization projects, conscious of the need to ensure these investments create value as well as reduce emissions," the CEO said.

In Brazil, ArcelorMittal and Petrobras have signed a memorandum of understanding to assess potential business models for low-carbon fuels, hydrogen and its products, renewable energy production and carbon capture and storage, following a joint study to develop a CCS hub in the state of Espirito Santo.

Sales of low-carbon steel XCarb products, which can have a carbon footprint of as low as 300kg CO2/mt, reached 229,000 mt in 2023, a figure predicted to double in 2024, the company said.

Platts launched its carbon-accounted price assessments in May 2023, following the market trend for lower-carbon steel demand.

Platts assessed Northwest European HRC carbon-accounted coil up Eur5/mt on the day at Eur765/mt ($817/mt) ex-works Ruhr May 1.