Johannesburg, South Africa — MININGREVIEW.COM — 28 October 2009 – ArcelorMittal South Africa “’ the local unit of the world’s largest steel maker “’ says that its third quarter steel output has risen 12% from the previous three months, and forecasts further improvement in the fourth quarter.
A statement released here said the company’s steel output had risen to 1.36 million tonnes, and that the group had posted an improved financial performance “’ its headline loss per share fell to 16 cents in the three months to 30 September from 136 cents in the second quarter. In the same quarter last year, the company had posted headline earnings per share of 846 cents.
The ArcelorMittal South Africa statement went on to say that its output had been 26% below the third quarter last year, owing to tight market conditions caused by the global economic downturn.
It added that export volumes in the third quarter had risen17% to 402 000 tonnes from the second quarter. The company said its production levels for the first six months of 2009 had been at about 60% of total capacity, but had increased to over 70% in the third quarter.
ArcelorMittal said that fourth quarter results would improve further, driven by higher sales and lower costs, with lower coal prices making the largest contribution. But the group warned that the rand’s performance was a critical variable in its outlook for the quarter. The rand had gained around 25% this year, diluting export earnings.
The statement predicted that domestic demand for steel was set to recover further during the fourth quarter on the back of a stronger international economy and a slight easing of credit requirements by the banking sector. But seasonal slowdown in the domestic activities during the festive season would have an influence on the sales volume.
"The recovery in the global economy should continue to boost demand for steel globally. Steel price improvements will depend on the discipline steel producers exercise in aligning production with demand,” the company suggested.
AercelorMittal South Africa said it had prepared Blast Furnace C at its main Vanderbijlpark plant, and would resume production as soon as market conditions justified an increase in volumes. Its Newcastle and Saldanha plants were currently running at full production.