Arcelormittal SA benefits from higher steel prices

A global steel shortage, due to a sharper-than-expected recovery in almost all markets, pushed global steel prices to record levels since 2008, helping ArcelorMittal SA cut its losses.

The voracious demand for steel in China returned almost immediately after breaking the restrictions regime in early 2020. But, as other steel-producing countries continue to restrict businesses due to Covid-19, there was simply no offer.

This applies not only to China. ArcelorMittal South Africa (AMSA) says the recovery has occurred in almost all international markets, including local demand from the construction and automotive sectors. Combined with high iron ore prices over the past nine years and rising prices for other raw materials, the shortage has brought global steel prices back to 2008 levels.

AMSA took advantage of the shortage by restarting its second blast furnace at Vanderbijlpark to support the supply of flat products. It was also decided to keep its electric arc furnace at Ferieniging in operation instead of mothballing it by the end of 2020 as planned.

Even before the price rebound, the South African steelmaker was taking steps to tackle the problem of a profit-seeking business by cutting costs, downsizing and changing its operating model.