ArcelorMittal South Africa Reports Results for 2020

ArcelorMittal South Africa announced results for 2020. ArcelorMittal South Africa said “China’s voracious demand for steel returned almost immediately after it emerged from lockdown in early 2020. But with other steel-producing countries still restricting factory activity because of Covid-19 the supply just wasn’t there. It wasn’t just China as the recovery was in nearly all international markets, including local demand from the construction and automotive sectors. AMSA took advantage of the deficit, restarting its second blast furnace at Vanderbijlpark to support the supply of flat steel. It also decided to keep its electric arc furnace at Vereeniging in operation instead of mothballing it towards the end of 2020 as planned.”

VOLUMES

48% reduction in liquid steel production to 2.3 million tonnes

47% reduction in sales volumes to 2.2 million tonnes

37% excluding loss-making Saldanha Works volumes

28% excluding loss-making (i) Saldanha Works and (ii) long steel export volumes

37% reduction in local sales volumes to 1.9 million tonnes

72% decrease in export sales volumes to 318 000 tonnes SALES PRICE

5% reduction in overall realised dollar steel price

6% increase in realised rand prices due to ZAR/USD weakness

ZAR 130 million value added export assistance provided to downstream industry

INPUT COSTS

RMB constitutes 41 % (2019: 51 %) of cash cost per tonne

RMB decreased by 10% in rand terms

Consumables and auxiliaries constitutes 31% of cash cost per tonne (2019: 29%)

Consumables and auxiliaries increased by 24%

Electricity increased by 10%

Fixed cost constitutes 28% of cash cost per tonne (2019: 23%)

Despite the impact of lower volumes, the increase in fixed cost was limited to 34%

OUTLOOK H1 2021

Increased infection rate continue to pose a risk

Continued focus on health and wellbeing of employees

Strong international steel prices expected to remain in the near-term

Benefits of cost savings and asset footprint adjustments to be sustained

Improved performance from H2 2020 to continue in H1 2021