ArcelorMittal reports highest profits since 2008

ArcelorMittal SA updates

ArcelorMittal has reported its highest profits since 2008, as the world’s largest steelmaker benefited from a global economic upswing.

The Luxembourg-based group said that profits rose sevenfold in the second quarter to $5.1bn, ahead of analysts’ estimates of $4.67bn.

Steel markets have rallied this year in the US and Europe, helped as the construction industry rebounds from the pandemic and governments step up infrastructure spending.

Constraints on supply have also buoyed prices. China, the world’s largest producer, is trying to curb steel output in a bid to lower its carbon emissions to meet targets set by President Xi Jinping.

“The second quarter has seen a continued strong recovery backdrop alongside a sustained lean inventory environment,” said chief executive Aditya Mittal.

As a result of the booming market, ArcelorMittal upgraded its forecast for growth in steel consumption to between 7.5 per cent to 8.5 per cent from an earlier estimate of 4.5 per cent to 5.5 per cent. The company also announced a $2.2bn share buyback programme.

ArcelorMittal said it would also spend about $10bn by 2030 to decarbonise its steelmaking operations. The company has pledged to have net-zero emissions by 2050 and said executive pay would be linked to that target.

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Its Sestao plant in Spain would become the first zero carbon emissions steel plant by 2025, using green hydrogen to produce steel, the group said earlier this month.

But supportive government policies to help the industry bear the costs of moving to making lower carbon steel were needed, ArcelorMittal added, claiming the industry was in a similar position to renewable energy over a decade ago.

“The importance of solar and wind was widely acknowledged yet the technology remained economically prohibitive,” Mittal said. “Targeted, reliable and thoughtful policies supported innovation and investment that enabled both companies and their financing partners to make long-term planning decisions.”

Shares in the Amsterdam-listed group have surged 51 per cent this year.

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