Global steel prices help ArcelorMittal SA return to profit

SA’s largest steel producer, ArcelorMittal SA (Amsa), returned to profit in the year to end-December, boosted by higher average international steel prices, which were in turn lifted by low supply chain stocks.

Headline earnings per share, the main profit measure in SA that strips out exceptional times, was R6.15, swinging from headline loss per share of R1.85 the year before, the company said in a results statement on Thursday.

Revenue surged 61% to R39.7bn due to a 13% rise in total steel sales volumes and a 47% rise in net realised steel sales prices.

However, Amsa managed to keep a lid on input costs that rose just 10%. The raw material basket is made up iron ore, coking coal and scrap, which makes up 43% of cash cost per tonne.

“The outlook for global steel demand remains generally positive heading into 2022. In SA and neighbouring countries, it is likely that demand will ease back to more moderate growth levels,” CEO Kobus Verster said in a statement.

“Due to a combination of supply side constraints and interventions, along with the sporadic demand momentum (especially in developing economies), international steel prices are off the highs of 2021, although prices continue to receive support from robust raw material prices.”