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ACL - Unaudited operational information for the quarter ended 30 September 2017
ArcelorMittal South Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1989/002164/06)
Share code: ACL
ISIN: ZAE 000134961
(ArcelorMittal South Africa, the company or the group)
Unaudited operational information for the quarter ended 30 September 2017
Salient features
- LTIFR weakened from 0.09 to 0.13 at the end of Q3 2017
- Difficult trading conditions in the domestic market
- Volatility in the rand/US dollar exchange rate continues
to impact the business significantly
- Refurbishment of coke batteries at Newcastle Works completed in Q3 2017
- Liquid steel production up 11%
- Local sales up 6%
- Export sales up 49%
- Implementation of safeguards on hot rolled coil and plate since 11 August 2017
- 10% duties on heavy sections
Operational information
Nine
Quarter ended months Year
30 Sept 30 Jun % 30 Sept % 30 Sept 31 Dec
2017 2017 change 2016 change 2017 2016
Liquid steel production 000 tonnes 1 240 1 175 5.5 1 115 11.2 3 614 4 771
Flat steel products 000 tonnes 914 836 9.3 712 28.4 2 563 3 221
Long steel products 000 tonnes 326 339 (3.8) 403 (19.1) 1 051 1 550
Capacity utilisation % 81 78 3.8 73 11.0 80 78
Flat steel products % 87 80 8.7 68 27.9 82 77
Long steel products % 68 72 (5.6) 84 (19.0) 76 81
Steel sales
Local 000 tonnes 863 774 11.5 814 6.0 2 492 3 275
Flat steel products 000 tonnes 613 547 12.1 518 18.3 1 780 2 097
Long steel products 000 tonnes 250 227 10.1 296 (15.5) 712 1 178
Export 000 tonnes 202 271 (25.5) 136 48.5 720 812
Flat steel products 000 tonnes 127 171 (25.7) 105 21.0 466 639
Long steel products 000 tonnes 75 100 (25.0) 31 141.9 254 173
Total 000 tonnes 1 065 1 045 1.9 950 12.1 3 212 4 087
Flat steel products 000 tonnes 740 718 3.1 623 18.8 2 246 2 736
Long steel products 000 tonnes 325 327 (0.6) 327 (0.6) 966 1 351
Coke and Chemicals
Commercial coke produced 000 tonnes 47 52 (9.6) 44 6.8 147 251
Commercial coke sales 000 tonnes 49 46 6.5 46 6.5 141 324
Tar sales 000 tonnes 20 19 5.3 19 5.3 59 75
Commentary
This analysis is for Q3 2017 compared to Q3 2016.
Safety
Safety remains our number one priority. Lost time injury frequency rate (LTIFR) weakened from 0.09 to 0.13.
Production
Liquid steel production was 125 000 tonnes (11.2%) higher, mainly due to higher production at Saldanha Works
as a result of the mini-reline in Q3 2016. This has been partly offset by lower production at Newcastle Works
following a cutback in production as a result of high input costs and poor market conditions. The capacity
utilisation for Q3 2017 increased to 81% compared to 73% in the comparable period.
Sales
Local
Local sales were 49 000 tonnes (6.0%) higher, mainly due to higher local demand for flat products as a result of the
implementation of safeguards on hot rolled coil since the beginning of August. Long product sales decreased by 15.5%
following strong competition from scrap producers in relation to manufacturers using raw materials in their production
process.
Imports declined by 142kt as a result of safeguards, weaker local market and high stock levels.
Export
Export sales increased by 66 000 tonnes (48.5%). Flat products was higher by 22 000 tonnes and long steel products by
44 000 tonnes. The strong international demand was however muted by the strengthening of the average rand/US dollar
exchange rate for most of the quarter.
Commercial coke
Commercial coke sales were 3 000 tonnes (6.5%) higher. The refurbishment of its coke batteries at Newcastle Works was
completed in Q3 2017 which had the effect of limiting the amount of coke available for blast furnace production and for
sale to the commercial coke industry. During the repair of the coke batteries, the company imported metallurgical coke
in order to supplement shortfalls.
Outlook for Q4
Local sales will continue to be under pressure due to tough trading conditions, mainly as a result of lower steel
demand due to poor economic conditions but it is expected to be slightly higher in Q4 2017 due to lower imports.
Export sales will also be higher due to better international prices.
ArcelorMittal South Africa remains firmly of the opinion that a solution is required to protect the downstream
industry from cheap finished and semi-finished products that continue to be imported into the country. We continue to
engage government and the downstream industry on the implementation of safeguards and initiatives to stimulate local
demand.
A sustainable solution is needed for the high increases anticipated in electricity and rail costs in South Africa,
which will significantly impact the viability of some of our plants going forward. The general impact of these increases
on the national economy is also a concern.
The volatility in the rand/US dollar exchange rate will continue to have an impact on our financial results.
By order of the board
23 October 2017
Sponsor: Absa Bank Limited (acting through its Corporate and Investment Banking division)
Release date: 10 November 2017
For further information please contact:
Hennie Vermeulen, Group Manager: Corporate Communications
Telephone +27 16 889 2352
This report is available on ArcelorMittal South Africa’s website at: http://www.arcelormittalsa.com
Date: 10/11/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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