More bad news for iron ore, coking coal prices: world’s largest steelmaker profits halve, sees worse ahead
ZeeNews report the world’s largest steel-maker ArcelorMittal on Thursday reported a dip of over 51% in net income to $659 million for the quarter ended September 30, 2011, due to a fall in demand. The Indian giant also said it will face increasing pricing and volume pressures in the final quarter and is idling production as a result – it has mothballed eight furnaces in Europe and permanently retired another just over the last two months. Zee News reports “Steel shipments in the fourth quarter of 2011 are expected to be lower than third quarter, 2011, levels, reflecting customers’ ‘wait-and-see’ approach,” the Lakshmi Mittal-headed firm said in its guidance for the October-December period.Bloomberg quotes Rochus Brauneiser, an analyst at Kepler Capital Markets in Frankfurt: “They’re confronted with a relatively tricky fourth quarter with volumes and prices down,” This will be a very uncertain environment and we also don’t know what is going on in the European sovereign debt crisis. It can change day by day. We’re in a very dark market environment right now.”
One of the company’s bigger subsidiaries, ArcelorMittal South Africa (JNB:MTP) swung into a $58 million loss after a quarter characterized by equipment failure, now the subject of a $140 million insurance claim, that put a huge dent in production, higher input costs, three fatalities and a pricing dispute with a unit of Anglo American.
MINING.com reported last week ArcelorMittal (NYSE:MT) pulled out of its joint $5 billion bid with US giant Peabody Energy for Australian coking coal miner Macarthur, just days after the target’s top shareholder accepted the offer and left the Indian steelmaker with a higher than expected cost.
Some observers were skeptical when Peabody and Arcelor raised their bid at at time coking coal prices – vital in the steelmaking process – have been falling and according to a new report could pull back to $240/tonne towards the end of next year. Iron Ore prices have also come under pressure recently and $140 / tonne is now predicted for end 2011, down from record highs above $180 at the start of the year.
One of the company’s bigger subsidiaries, ArcelorMittal South Africa (JNB:MTP) swung into a $58 million loss after a quarter characterized by equipment failure, now the subject of a $140 million insurance claim, that put a huge dent in production, higher input costs, three fatalities and a pricing dispute with a unit of Anglo American.
MINING.com reported last week ArcelorMittal (NYSE:MT) pulled out of its joint $5 billion bid with US giant Peabody Energy for Australian coking coal miner Macarthur, just days after the target’s top shareholder accepted the offer and left the Indian steelmaker with a higher than expected cost.
Some observers were skeptical when Peabody and Arcelor raised their bid at at time coking coal prices – vital in the steelmaking process – have been falling and according to a new report could pull back to $240/tonne towards the end of next year. Iron Ore prices have also come under pressure recently and $140 / tonne is now predicted for end 2011, down from record highs above $180 at the start of the year.
Comments
Post a Comment