ArcelorMittal’s steely year
However, ArcelorMittal South Africa managed to increase its share of the domestic market in 2014 to about 62% despite the fact that there was no production from Newcastle for six months.
ArcelorMittal South Africa has reported a total loss of R227 million for the year 2014.
While this amount is higher than 2013’s R224 million, SA and the company itself went through many economic changes.
The rising costs of living in South Africa, coupled with the drop of China’s steel imports and the reline of the Newcastle Blast furnace have all factored into this loss.
However, the steel giants are still confident with their products, as steel sales have remained largely unchanged at 4.2 million tonnes for the year.
The suspension of the Newcastle Blast furnace due to the reline, which is now complete, resulted in an opportunity loss of R1 200-million. The weaker Rand/US dollar exchange rate also meant the overall cost of operations were increased for the company.
Liquid steel productions dropped by 578 000 tonnes and this drop was directly influenced by the reline.
However, ArcelorMittal South Africa managed to increase its share of the domestic market in 2014 to about 62% despite the fact that there was no production from Newcastle for six months.
Announcing the results, ArcelorMittal South Africa CEO, Paul O’Flaherty commented: “Cheaper imports into local markets, most notably from China, continue to impact our sales, regardless of a depreciated exchange rate position.”
Over the last year, four lives were lost on the company’s operations as well, despite the company’s firm stance to ensure a rapid reversal of its safety performance, having implemented measures to enhance its safety programme, which has already seen some improvement over the last quarter of 2014.
Further good news for the company came out of Newcastle Works, after its Zero Effluent Discharge (ZED) project, which concentrates of the improvement of effluent treatment, was completed at a cost of R430 million last year. The construction of a new BOF slag disposal facility at Newcastle is one of AcelorMittal’s new investments for this year.
With the Newcastle blast furnace fully commissioned and the expectation that local steel demand will revert to the levels of 2013, ArcelorMittal South Africa expects higher sales. However, international steel prices, on which the local prices are based, are expected to remain low for the first six months of the year.
“Although we expect international steel prices to remain low for the first half of the year, these factors, together with ArcelorMittal South Africa producing to full capacity and reducing costs, should contribute positively to the results,” concluded Mr O’Flaherty
