ArcelorMittal Q3 Results: 43% Drop in Profit Amid Global Steel Market Challenges

Steel Market Oversupply and Declining Demand Weigh on Earnings
ArcelorMittal reported a sharp decline in its third-quarter 2024 financial performance, with net income falling by 43% from the previous quarter and 69% year-on-year, reaching $287 million. The Luxembourg-based steel giant also saw a 36% drop in operating income and an 11% decrease in sales compared to the same period in 2023. The company attributed the poor results to ongoing global oversupply, particularly from China, and weaker demand in key markets.

Impact of China’s Steel Overproduction and European Market Pressures
The steelmaker specifically pointed to China’s excess production as a major factor, noting that the country’s overproduction has led to aggressive exports and low domestic steel prices, especially in Europe. ArcelorMittal CEO Aditya Mittal warned that the current market conditions, characterized by steel prices in Europe being below the marginal cost curve, are unsustainable. The company also expressed concerns about the rising levels of steel imports into Europe, urging for stronger trade measures to protect European producers.

Investment in Decarbonization and Sustainability Efforts
In line with its long-term sustainability goals, ArcelorMittal made significant investments in decarbonization, spending $100 million in the third quarter alone, bringing its total spending on carbon-reduction projects to $200 million for the year. The company stressed the importance of the EU’s Carbon Border Adjustment Mechanism (CBAM) and called for stronger regulations to ensure European steelmakers can remain competitive against higher-emission imports.

Long-Term Steel Demand Outlook Remains Positive
Despite the challenging market environment, ArcelorMittal remains optimistic about the global steel market’s long-term prospects. The company anticipates stronger demand in the second half of 2024, driven by restocking as inventory levels are low. ArcelorMittal’s geographical diversification and strong research and development capabilities are expected to position it well for future growth.