NEW YORK Modest inventory restocking in the second half of 2013 following multi-month inventory lows will likely boost the U.S. steel sheet market, according to the top executive of the worlds largest steelmaker.
"In the U.S., the economic growth in the first half of 2013 was only 1.4 percent, mainly due to the sequester and underlying fundamentals," ArcelorMittal SA chairman and chief executive officer Lakshmi Mittal said during the companys second-quarter earnings call Aug. 1.
Mittal said that robust automotive sales, increased appliance demand and strong residential construction growth remained bright spots in the North American market, adding that much of the weakness in the companys first-half was due to service centers keeping inventories lean.
"Inventory in the States is now at a low and the slow rebound in the second half should be supported by mild restocking," he said.
The Luxembourg-based companys Flat Carbon Americas sector posted sales of $4.79 billion in the second quarter, down 1.4 percent from $4.86 billion in the first quarter, and down 10.6 percent from sales of $5.36 billion in the second quarter of 2012.
The companys operating income in the same segment dropped to $61 million in the quarter, down 69.5 percent from $200 million in the previous quarter, and down 81.6 percent from $332 million in the second quarter a year ago.
Steel shipments in the Flat Carbon Americas sector fell to 5.41 million tonnes, down 2.7 percent from the previous quarter, and down 5.7 percent compared with the same period a year ago.
Louis L. Schorsch, chief executive officer of ArcelorMittals Flat Carbon Americas unit, said the recent pickup in sheet tags has been helpful, particularly because the first half of the year saw a lot of weakness.
"If you look at the entire year, we were actually a little puzzled that prices were seemingly relatively depressed in the first quarter and into the second quarter," he said.
Average selling prices in Flat Carbon Americas sector were $831 per tonne in the second quarter, up 1.5 percent from $819 per tonne in the first quarter, but down 5.7 percent from $881 per tonne in the second quarter of 2012.
Looking ahead, the company said the U.S. steel market remains lackluster, issuing a zero to 1 percent prediction target for apparent steel consumption in 2013.