ArcelorMittal, the world's number-two steel maker, saw its net profit tumble by 78% in the third quarter of 2022 as metal prices fell from "exceptional" levels during the post-Covid recovery and energy prices soared.
The global steel market is suffering both from the slowdown in China's economic growth -- the world's largest user of steel -- and from the fallout of the war in Ukraine and the surge in energy prices in Europe.
From July to September, ArcelorMittal said in a statement that it made a net profit of $993 million compared to $4.6 billion in the same quarter last year, bringing the profit for the first nine months of the year to $9 billion compared to $10.9 last year.
"The strong market conditions enjoyed for much of the past two years deteriorated in the third quarter as seasonally lower shipments, a reduction in exceptional price levels, destocking and higher energy costs combined to put profits under pressure," said Aditya Mittal, ArcelorMittal CEO.
While expressing confidence in his group's resilience he warned that the "short-term outlook for the industry remains uncertain and caution is appropriate."
In September, ArcelorMittal said it would shut down two of its blast furnaces in Europe over high energy prices and lower demand.
Its furnaces in Bremen in northern Germany and near Gijon in northern Spain will cease to operate until further notice at the end of the month, it announced.
The CEO of the group's partially-idled Hamburg site, Uwe Braun, told AFP in October that its gas bill had multiplied by seven compared to the period before Russia's invasion of Ukraine.
In Thursday's update the steelmaker said it had reduced European gas consumption by 30% amid soaring costs.
- Gas prices -
Total steel shipments in the third quarter were down just over seven percent compared with the same quarter the previous year, which the group said largely reflects weaker demand and seasonality in Europe.
But the group said shipments "remain broadly stable" -- excluding ArcelorMittal Kryvyi Rig which is impacted by the war in Ukraine.
Work halted for a month when Russian forces approached Kryvyi Rig, but eventually restarted at a reduced tempo.
The steelmaker has also said that it continues towards a goal of decarbonisation for its future business strategy.
Mittal said in Thursday's update that the group hoped the COP27 summit in Egypt would lead to the "scaling up of renewable energy, critical for both the decarbonization of steel and enhanced energy security."
The update said the group had broken ground on its first low-carbon emissions steelmaking project in Canada, which removes coal from the ironmaking process.
Copyright 2022, Agence France-Presse