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ArcelorMittal still keen on ThyssenKrupp mill

Keywords: Tags  steel, flat-rolled steel, slab, Alabama mill, ThyssenKrupp, ArcelorMittal, ArcelorMittal USA, Louis Schorsch Lakshmi Mittal


NEW YORK — ArcelorMittal SA, the world’s largest steelmaker, remains interested in ThyssenKrupp AG’s rolling facility in Calvert, Ala., according to its top executive.

"On Alabama, we have said before that we continue to remain interested. We think that it is a good asset and it could (help) our franchise in the United States," Lakshmi Mittal, chairman and chief executive officer of the Luxembourg-based steelmaker, told analysts during a Nov. 7 conference call on its third-quarter earnings results.

When asked about the company’s interest in ThyssenKrupp’s slab facility, Cia. Siderúrgica do Atlântico SA, which is also up for sale, Mittal said the "one thing that we are not is short slab."

Speculation among market participants has mounted recently that an imminent deal for ThyssenKrupp’s Alabama facility could be announced in the coming days, and that the likely buyers would be ArcelorMittal and Tokyo-based Nippon Steel & Sumitomo Metal Corp.

Last May, ThyssenKrupp said it was mulling strategic options for its Steel Americas operations, calling into doubt its business model of shipping slab made in Brazil to finishing facilities in Alabama (amm.com, May 15, 2012).

For the quarter ended Sept. 30, the company said it has seen a "clear improvement" across its business sectors compared with the same period a year ago, adding that the "low point" of the cycle was in the second half of 2012.

"Our third-quarter shipments are up year on year. This is the first notable year-on-year increase in shipments since the first quarter of 2010," Mittal said.

At its Dofasco plant in Hamilton, Ontario, ArcelorMittal has been making progress toward optimizing costs and increasing shipments of galvanizing products. As a result, it will restart construction of its No. 6 heavy-gauge galvanizing line, which has an annual capacity of 660,000 tons, and will close its smaller No. 2 line, which has a 400,000-ton capacity. The new line will also incorporate advanced high-strength steel capability. The project is expected to be completed by 2015.

The Flat Carbon Americas unit raised crude steel output by 13.5 percent to 6.3 million tons in the third quarter. This was due to "significant improvement" in the U.S. market after the resolution of labor issues at its Burns Harbor, Ind., mill and operational incidents at Indiana Harbor East and West that had impacted results in the prior quarter, ArcelorMittal said.

Steel shipments in the segment totaled 5.76 million tons, up 6.5 percent from 5.41 million tons in the previous quarter, driven primarily by higher shipment volumes in North America.

The division recorded sales of $4.92 billion in the quarter, up 2.8 percent from $4.79 billion in the second quarter due to higher shipments offset by lower average selling prices, particularly in Mexico and South America. Average selling prices fell 3.2 percent quarter on quarter to $804 per ton from $831 per ton.

But while underlying fundamentals look positive in the U.S. market, steel demand has been impacted by the sequestration in the first half of the year and a U.S. government shutdown in the second half, issues that have "shaken up" consumer confidence in the region, Mittal said. However, automotive sales and appliance demand remain strong.

When asked about the recent higher pricing in the sheet market compared with global pricing, Louis L. Schorsch, chief executive officer of ArcelorMittal’s Flat Carbon Americas unit, confirmed that the differential is an area of concern.

"We see more of a stable market in the U.S. today and in general for finished product prices. We see some support for (high prices) particularly because of key raw materials, and our immediate expectation is that it’ll be up at least $25 (per gross ton) and through the end of the year another $50 up (per ton)," he said. "But I think we all recognize that ultimately, this is a global market ... and that the current spread between North American prices and those in other markets are wider. That’s a spread that’s unsustainable."

Subsidiary ArcelorMittal USA LLC, Chicago, had a planned outage at its Cleveland facility to reline its blast furnace (amm.com, June 19).

The outage, which took about 100,000 net tons offline per month, will produce at a higher level when it comes back online in November, Schorsch said.

The company also reversed its forecast for the U.S. steel market, saying that while it was in "positive territory" at the start of the year, it has reissued an apparent steel consumption forecast of minus 1 percent to zero compared with 2012, down from a 2- to 3-percent forecast earlier this year, due to destocking and government-related issues.

ArcelorMittal posted a third-quarter net loss of $193 million, down 75.3 percent from a year-earlier net loss of $780 million, on sales that fell 2.7 percent to $19.64 billion.


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