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Unaudited operational information for the quarter ended 30 September 2016
ArcelorMittal South Africa Limited
("ArcelorMittal South Africa", "the company"? or "the group"?)
Registration number: 1989/002164/06
Share code: ACL ISIN: ZAE 000134961
Unaudited operational information for the quarter ended 30 September 2016
Highlights
- Saldanha Works mini-reline started and completed in quarter 3 2016
- Local sales up 3% compared to quarter 3 2015, but down 11% compared to quarter 2 2016
- Vanderbijlpark Works ZED compliant
- Vanderbijlpark Works reached 200 days LTI free in October
- One LTI for quarter 3 2016, LTIFR of 0.61 at the end of quarter 3
Commentary
Production: Q3 2016 versus Q3 2015
Liquid steel production was 67 000 tonnes (6%) lower mainly due to the planned mini-reline at Saldanha Works resulting
in approximately 110 000 tonnes of lost production.
Despite the lost production, the company ran at an effective capacity utilisation of 73% compared to 72%. This was due
to lower production at Vanderbijlpark Works in quarter 3 2015 mainly due to the stoppage of one blast furnace as a
result of poor local demand.
Production was further negatively impacted by a full electricity outage at Vanderbijlpark Works coupled with weaker
quality iron ore and coke input material. Had Vanderbijlpark Works and Saldanha Works run normally, normalised capacity
utilisation for the company would have been around 80%.
Sales: Q3 2016 versus Q3 2015
Local
Local sales were 20 000 tonnes (3%) higher driven mainly by flat products. Despite the reline at Saldanha Works, flat
product sales increased by 3% and long products sales by 2%. However, local sales were still 11% less than quarter 2 of
2016 due to weaker local demand and ongoing imports.
Although having declined slightly from 2015 levels, imports are still high despite the 10% duties having been imposed.
The need for additional protection through safeguards is therefore imperative to address the surge in imports.
Export
Export sales decreased by 244 000 tonnes (64%). Exports of flat products were 140 000 tonnes lower largely due to the
reline and weak international demand. Long products were 104 000 tonnes lower as a result of weak international demand
which was compounded by the strengthening of the average rand/US dollar exchange rate in the quarter and the oversupply
of steel in the global market.
Commercial coke
Commercial coke sales were 41 000 tonnes (48%) lower than quarter 3 of 2015. The company is currently undertaking a
repair programme on two of its coke batteries which has the effect of limiting the amount of coke available for sale to
the commercial coke industry. During the repair of the coke batteries, the company imports metallurgical coke in order to
supplement shortfalls.
Outlook for quarter 4
Despite the expected seasonal impact of the slowdown on local sales during the festive period, export sales are
expected to increase compared to quarter 3 2016, mainly due to increased blue water exports. As reported in our interim
results in July 2016, ArcelorMittal South Africa has been experiencing tough trading conditions mainly as a result of lower
steel demand due to poor economic activity and ongoing imports. We do not expect this to change in the next quarter.
ArcelorMittal South Africa supports the notion that a solution is required to protect the downstream industry from
cheap imports of finished and semi-finished products that continue to be imported into the country.
By order of the board
4 November 2016
Sponsor: JP Morgan Equities South Africa Proprietary Limited
Release date: 8 November 2016
For further information please contact:
Themba Sepotokele, Corporate Communications, Corporate Affairs
Tel:+27 16 889 2425
Operational information
Quarter ended Nine months Year
30 Sept 2016 30 Jun 2016 % change 30 Sept 2015 % change 30 Sept 2015 31 Dec 2015
Liquid steel production (000' tonnes) 1 115 1 293 (13.8) 1 182 (5.7) 3 635 4 839
- Flat steel products 712 905 (21.3) 772 (7.8) 2 444 3 145
- Long steel products 403 388 3.9 410 (1.7) 1 191 1 694
Capacity utilisation (%) 73 85 (14.1) 72 1.4 79 74
- Flat steel products 68 87 (21.8) 73 (6.8) 78 75
- Long steel products 84 82 2.4 71 18.3 84 73
Steel sales (000' tonnes)
- Local 814 910 (10.5) 794 2.5 2 609 3 039
- Flat steel products 518 586 (11.6) 503 3.0 1 664 1 915
- Long steel products 296 324 (8.6) 291 1.7 945 1 124
- Export 136 220 (38.2) 380 (64.2) 583 1 092
- Flat steel products 105 177 (40.7) 245 (57.1) 448 763
- Long steel products 31 43 (27.9) 135 (77.0) 135 329
- Total 950 1 130 (15.9) 1 174 (19.1) 3 192 4 131
- Flat steel products 623 763 (18.3) 748 (16.7) 2 112 2 678
- Long steel products 327 367 (10.9) 426 (23.2) 1 080 1 453
Coke and chemicals (000' tonnes)
- Commercial coke produced 44 71 (38.0) 85 (48.2) 201 406
- Commercial coke sales 46 111 (58.6) 89 (48.3) 284 451
- Tar sales 19 17 11.8 24 (20.8) 56 96
This report is available on ArcelorMittal South Africa's website at: http://www.arcelormittalsa.com
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