ArcelorMittal South Africa has substantially narrowed its headline loss to ZAR 65 million in the third quarter of the year as compared with a headline loss of ZAR 607 million in the previous quarter. A 19% increase in sales volumes, a moderate improvement in steel prices and lower raw material input costs had contributed to the improved performance.
Liquid steel production had increased by 12% QoQ to 1.37 million tonnes, but was down by 26% YoY. ArcelorMittal South Africa’s Blast Furnace C at the Vaderbijlpark Works was being prepared for a restart once market conditions justify an increase in volumes. Its Newcastle and Saldanha Works were already operating at full capacity.
Ms Nonkululeko Nyembezi Heita CEO of ArcelorMittal SA said that "We are pleased with the rebound in our business during the third quarter. The performance is not only due to higher sales volumes and reduced raw material prices, but also reflects improved operational efficiencies and the impact of the cost cutting measures we have instituted since September 2008."
She pointed out, however, that while domestic steel prices had showed some modest increases in the quarter ended September 30th 2009, these did not mirror the more robust increases seen in overseas markets, owing the strength of the rand against the US dollar.
Ms Nyembezi Heita expected the producer’s results to improve further in the fourth quarter of the year, as improved domestic demand drives higher sales and the impact of lower raw material prices is seen for the full three-month period. She said that "However, the rand’s performance remains a critical variable in our outlook for the quarter."
