ArcelorMittal offered a cautiously upbeat outlook for the global steel industry, saying its core markets are showing signs of recovery from exceptionally low levels amid the coronavirus pandemic.
“The first six months of the year, and particularly the second quarter, have been one of the most difficult periods in the history of the company, with demand for steel considerably disrupted by the Covid-19 pandemic,” CEO Lakshmi Mittal said in a statement on Thursday.
Still, second-quarter earnings before interest, taxes, depreciation and amortization were $707-million, beating analyst estimates.
ArcelorMittal last quarter suspended dividends, cut its spending plans and withdrew its global guidance over uncertainty caused by the virus. The company said it expected the second quarter would be the “low point” for activity.
The global steel industry in April saw its worst slump in production in a decade as demand from key consumers, including automakers, was hit hard by coronavirus lockdowns. Top producer China was quick to recover, with fresh output records in June.
While the slowdown in other regions has eased, production from steelmakers outside China remains a long way off pre-pandemic levels, according to the World Steel Association. Steel demand -- a barometer of the global economy -- will take more than a year to fully recover even with massive stimulus measures worldwide, it said in June.
“There are now signs of activity picking up, especially in regions where lockdowns have ended, but clearly it is prudent to remain cautious about the outlook,” said Mittal. “Against this context, we are examining what structural changes might be required to ensure the company is well configured to prosper in the coming years as demand recovers.”