ArcelorMittal NAFTA Sales Increase 4.1% in Q3

NAFTA sales, which include the flat, long and tubular operations of USA, Canada and Mexico, were up 4.1 percent sequentially to $5.6 billion in the third quarter. Steel shipments increased were up 1.3 percent from the previous quarter to 5.9 million tonnes (6.5 million tons). Flat product shipments increased by 2.9 percent, which was partially offset by a 1.8 percent decline in long products. Crude steel production increased by 5.4 percent due primarily to the third quarter completion of the blast furnace reline at Indiana Harbor No. 7.

Construction continues on the Dofasco heavy gauge galvanizing line #6 which will have a capacity of 660ktpy and increase galvanized product shipments by 0.3 million tonnes. The project is expected to be completed in 2015 at which time the smaller #2 line (400ktypy) will be closed. The #6 line will have advanced high strength steel capability to enhance the company’s presence in automotive, construction and industrial machinery

At AM/NS Calvert a $40 million slab yard expansion was begun to increase Calvert’s staging capacity and efficiency. Project completion is expected in second quarter 2016. Investment has also been made to modify the existing continuous coating line #4 to will increase capacity to produce press hardenable steels, such as Ductibor and Usibor used in automotive applications. Modifications are expected to be completed by the end of 2014 with production beginning in early 2015.

An outage at AM/NS Calvert in third quarter slowed production. The unplanned maintenance outage involved repairs to the furnace in the hot strip mill.

“I would mention in the Calvert situation, we did take that facility down a touch [indiscernible] it’s literarily the first planned outage in its history,” said Louis L. Schorsch, Chief Technology Officer of Research & Development and CEO of ArcelorMittal Americas. “It’s been operating for 4 years so — and we did find that we needed to do more extensive work than we had wanted to do. But again, I think given that we just acquired the facility for the first time in 4 years, it wasn’t that dramatic a surprise.”

Schorsch said there is no major maintenance or outages scheduled in the US for fourth quarter or into 2015.

Commenting on benefits of steel for automotive manufacture, Lakshmi Mittal, Chairman, President & CEO, said “We at ArcelorMittal continue to believe that the steel will remain the material of choice for automotive.” The Volvo XC-90 is 40 percent hot-formed steel, said Mittal, and he noted that Chevrolet has recently launched its “toughnology” concept for the 2015 Silverado light truck that showcases the use and advantages of AHSS.

Aditya Mittal, CFO, confirmed that ArcelorMittal continues to remain interested in acquiring the Italian steelmaker Ilva.

In its guidance for 2014, ArcelorMittal said it expects EBITDA of >$7.0 billion and capital expenditures of $3.8 billion for the year.

No further major steel capex is planned until the company meets its medium term $15 billion net debt target and market conditions improve.

“Based on the current economic outlook, ArcelorMittal continues to expect global apparent steel consumption (“ASC”) to increase by approximately 2.25-2.75% in 2014. Steel demand in the US has been strong and US ASC growth in 2014 has been upgraded to a forecast range of 8.25-8.75%. Demand conditions in Europe have also remained robust during the seasonally weak summer period, and we maintain ASC growth expectations in 2014 of 3-3.5%. In China, we see signs of stabilization due to the government’s targeted stimulus, and expect steel demand in the range of 1.5-2.0%. While risks remain to steel demand in the CIS and other emerging markets including Brazil, the stronger fundamentals in our key developed world markets continue to support our expectation that steel shipments should increase by approximately 3% in 2014 as compared to 2013.”