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ArcelorMittal Update on Brazil

Steel News - Published on Mon, 10 Aug 2020

Image Source: ArcelorMittal
Brazil segment crude steel production decreased by 36.8% to 1.7Mt in 2Q 2020 as compared to 2.7Mt for 1Q 2020 with declines in both flat and long products.

The COVID-19 pandemic and government containment efforts have impacted the Latin America region later than in some other geographies. As a result, the Company idled ArcelorMittal TubarSo's blast furnace No3 from April 21, 2020, together with production curtailments in Argentina and of long product capacity in Brazil, to match demand levels. Subsequently, given the improving export market conditions and favorable cost position, the Company has since restarted activities at the No2 blast furnace at TubarSo, and some long product capacity in Brazil.

Steel shipments in 2Q 2020 decreased by 12.4% to 2.1 million tonne as compared to 2.4 million tonne in 1Q 2020. primarily due to COVID-19 pandemic impacts. Overall flat products declined by 15.9% while demand for long products declined by 8.4%.

Sales in 2Q 2020 declined by 25.2% to $1.2 billion as compared to $1.6 billion in 1Q 2020. Sales in 2Q 2020 were impacted by 12.4% lower steel shipments and 14.4% lower average steel selling prices.

Operating income in 2Q 2020 of $117 million was lower as compared to $150 million in 1Q 2020 and $234 million in 2Q 2019.

EBITDA in 2Q 2020 decreased by 23.3% to $168 million as compared to $219 million in 1Q 2020, primarily due to the loss of profit margin on reduced steel shipments (fixed costs were reduced in line with lower shipments), on account of lower demand due to the COVID-19 pandemic, as well as negative translation effects.

EBITDA in 2Q 2020 was 46.4% lower as compared to $313 million in 2Q 2019 primarily due to lower steel shipment volumes (-26.1%).

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Posted By : Yogender Pancholi on Mon, 10 Aug 2020
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