ArcelorMittal, the world’s largest steel manufacturer, has reported a staggering 69% year-on-year decline in its net income for the July-September 2024 quarter, falling to USD 287 million. The sharp fall, from USD 929 million in the same quarter last year, was primarily driven by reduced steel shipments and weakened global demand for the metal, a crucial barometer for global industrial activity.
The Luxembourg-headquartered steel giant, which has a significant footprint in India, saw its third-quarter sales drop to USD 15.1 billion, down from USD 16.6 billion in Q3 2023. Additionally, the company’s crude steel production also took a hit, falling to 14.8 million tonnes (MT), a decrease from the 15.2 MT it produced in the same quarter of the previous year. Steel shipments were similarly down, at 13.4 MT compared to 13.7 MT a year ago. Despite the dismal results, ArcelorMittal remains optimistic about the long-term outlook for steel, underpinned by anticipated recovery in demand, especially in the second half of 2024. CEO Aditya Mittal highlighted that global steel demand is expected to improve as inventory levels are low and re-stocking is set to occur once demand rebounds. However, he voiced concerns over the rising import volumes in Europe, stressing that stronger trade measures are urgently needed.
From a sustainability perspective, the company has begun reaping the rewards of its green energy initiatives. A notable development was the launch of its first renewables project, a 1GW solar-wind hybrid project in India, which began supplying power to AMNS India’s Hazira plant in September. This project, with an investment of USD 0.7 billion, is expected to meet 20% of the plant’s electricity requirements, while cutting down carbon emissions by 1.5 million tonnes annually. Not only does this project represent a significant step towards ArcelorMittal’s environmental goals, but it is also projected to add USD 100 million to the company’s EBITDA.
The sustainability effort is in line with the company’s broader strategy to reduce its carbon footprint and enhance its green credentials. However, the immediate impact of weak market conditions poses a challenge to this vision, as companies like ArcelorMittal must navigate through sluggish demand while balancing the need to make significant investments in green technologies. For now, ArcelorMittal’s commitment to long-term growth and sustainability remains steadfast, with efforts to generate free cash flow and return capital to shareholders. Despite the current downturn, the company continues to invest in strategic growth opportunities, positioning itself as a key player in both the steel industry and the renewable energy sector. As the steel industry grapples with these challenges, stakeholders—including employees, investors, and consumers—are keeping a close eye on the company’s ability to weather the storm while meeting its ambitious sustainability targets.
