ArcelorMittal SA's production falls but sales increase due to exports

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ArcelorMittal SA managed to increase prices despite delays in implementing the 10% import tariff protection it has called for, it said in an operating update on Friday.

"For the first quarter, SA continued without duties on hot rolled coil resulting in 164,000 tonnes of steel being imported into the country for January and February, of which 79,000 tonnes was hot rolled coil," the company said.

While battling against cheaper imports, ArcelorMittal SA managed to grow exports by 10.2% to 227,000 tonnes. Domestic sales grew 1.4% to 885,000 tonnes

ArcelorMittal SA called for 10% tariff protection on 10 types of steel products. All of these have gained approval from the International Trade Administration Commission (Itac), but two of the applications - for hot rolled coil and other bars and rods - are still being taken through the relevant government process for implementation.

Despite not getting tariff protection against imports during the quarter, ArcelorMittal SA said it was able to raise prices because international prices rose.

The base price of hot rolled coil internationally increased by $86/tonne over the three months to March. At the same time, the main elements of the raw material basket - namely coal, iron ore and scrap - increased in price.

Compared with the December quarter when only one blast furnace was operated in its Vanderbijlpark works, production rebounded about 25%, ArcelorMittal SA said.

ArcelorMittal SA said in February it believed it could return to profitability this financial year if it received tariff protection shortly after the March quarter.

It said in Thursday's statement its tariff protection applications were nearing implementation.

Source: BDpro